Pizza Chains Melting Down

According to Blogs.Forbes.com, “It’s the slow season for pizza chains, and traders appear to be full of pizza stocks. Big revenue drivers like the Super Bowl are months away, and pizza price charts aren’t whetting the market’s appetite either.”

“Expansion has helped drive top line growth for Louisville-based Papa John’s (PZZA), yet higher volumes have stopped heating up earnings. During the second quarter, Papa John’s made $13.2 million, equal to $0.49 a share, falling short of last year’s $14.2 million profit. Aggressive discounting by competitors Dominos Pizza (DPZ) and Pizza Hut operator Yum! Brands (YUM), coupled with higher expenses (up 6 percent last quarter), is putting a sour spin on Papa John’s 5 percent revenue increase.”