Papa Murphy’s made a $642,000 profit in the first quarter of 2016, but that’s thin-crust in comparison to last year’s $2.6 million take.
The Vancouver-based take-and-bake pizza chain saw its sales fall 2.8 percent in the quarter ended March 28 compared with first-quarter 2015.
“Results for the first quarter were frankly unsuccessful, and I expect second quarter to be equally challenging,” CEO Ken Calwell said during an investors’ call Wednesday afternoon.
Though the company’s overall revenues jumped 13 percent to $33 million this past quarter, a big marketing push and lower same-store sales hurt the bottom line.
“Overall disappointing financial results,” Calwell said.
The $642,000 profit announced Wednesday represents $0.04 per diluted share, compared with first-quarter 2015’s $0.15 per diluted share.
Despite the short-term setback, Calwell stressed that 2016 will be a “transformational year” for Papa Murphy’s. The company plans to open as many as 120 new stores this year — most in undeveloped or underserved markets — and in the first quarter already cut the ribbon on 27 new locations.
As of March 28, there were 1,555 Papa Murphy’s locations, all but 42 of them in the U.S.
“We’re moving toward the goal of tripling our stores across the country,” Calwell said.
At the same time, the company is aggressively marketing its new online ordering system, which is being made available at a rapidly increasing number of stores.
Though online ordering only represented 6 percent of sales in the first quarter — up from 1 percent in all of 2015 — online sales tend to be 20 percent to 30 percent higher than in-person or phone orders, Calwell said.
“We believe technology is transforming the pizza industry,” he said.
Calwell hoped for better sales performance in the second half of the year, with marketing driving online sales and “increased brand awareness” in “underpenetrated markets.”
Papa Murphy’s, traded as FRSH on the Nasdaq, ended Wednesday at $12.42 per share, up 1.14 percent. The stock has traded as high as $22.72 and as low as $8.45 in the past year.
Brooks Johnson: 360-735-4547; brooks.johnson@columbian.com; twitter.com/readbrooks
