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  5. PZA: Hi 5i Team, Pls comment on Pizza Pizza Royalty Corp. [Pizza Pizza Royalty Corp.]
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Q: Hi 5i Team,
Pls comment on Pizza Pizza Royalty Corp. 4th qtr earning , same store sales keeps declining again,
Should I still hold it for income.?

Thanks for your guidance as always.
Asked by Pui on April 02, 2025
5i Research Answer:

EPS of 24.5c slightly missed estimates of 25c; revenue of $160.5M matched estimates. EBITDA of $9.3M was 7% short of estimates. The stock took a hit but had been strong going into the print. Same store sales dropped 3.8% and royalty pool sales were down 2.1%. Certainly this trend needs to reverse. Seven new locations were added. Payout ratio was 104% for the quarter and 96% for the year. PZA is working on its marketing programs to adapt to the 'challenging environment'. Considering some risk of recession in Canada, the short term outlook is not likely to improve much. Still, the stock is hanging in there, up a fraction on the year and up 3.5% over 52 weeks. At 13X earnings, it is priced well. We would still consider it a HOLD for higher risk income, but certainly would temper any expectations for capital gains in the short term. The payout ratio is high, but the royalty company requires essentially no capital and we would not be overly concerned there.