Papa Johns 2013 Annual Report Download - page 46
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CostsandExpenses.
TherestaurantoperatingmarginatdomesticCompany-ownedunitswas18.5%in
2013comparedto19.7%in2012(19.5%excludingthe$1.0millionadvertisingcreditfromPJMF).The
decreaseof1.2%consistedofthefollowingdifferences:
•
Costofsaleswas1.4%higherasa percentageofsales in2013duetobothhigher commodity
costsofapproximately$5.8million,includingcheese,doughandmeats,aswellaslowernational
promotionpricing.2012alsoincludedvarioussupplierincentives,aspreviouslynoted.
•
Salaries and benefits were 0.3% lower as a percentage of sales in 2013, primarily due to the
benefitofhighersalesvolumes.
•
Advertising and relatedcosts as a percentage of sales were relatively flat year-over-year; 2012
includeda$1.0millionadvertisingcreditreceivedfromPJMF.
•
Occupancycostsand otheroperatingcosts,onacombined basisasapercentageofsales,were
relativelyconsistent(20.3%in2013and20.4%in2012).
Domesticcommissaryoperatingmarginwas7.7%inboth2013and2012,withthefollowingdifferences
byincomestatementline:
•
Cost of sales was 0.6% lower as a percentage of revenues in 2013 primarily due to pricing
changes.
•
Salaries and benefits as a percentage of revenues were relatively consistent (4.3% in 2013and
4.1%in2012).
•
Other operating expenses were 0.4% higher as a percentage of revenues. This was primarily
attributable to higher distribution and other operating costs related to bringing distribution in
house for certain of our commissaries from a third party provider and the start up dough
productioncostsatourNewJerseycommissary,aspreviouslydiscussed.
Otheroperatingexpensesasapercentageofothersaleswere90.0%in2013,comparedto88.7%in2012.
Thehigheroperatingexpenseswereprimarilyduetotheimpactofthereducedcostdirectmailcampaigns
offeredtoourdomesticfranchisedrestaurantsbyPreferred.
Internationalrestaurantandcommissaryexpenseswere84.9%in2013comparedto84.6%in2012,asa
percentageoftotalrestaurantandcommissarysales.Theincreaseof0.3%isprimarilyattributabletothe
higher operating expenses associated with our China Company-owned restaurant operations. As
previously noted, our China Company-owned restaurant operations represented approximately 28% of
internationalrevenuesin2013and22%in2012,anincreaseof6%,andourPJUKoperationsrepresented
48%ofinternationalrevenuesin2013,adecreaseof3%.
Generalandadministrativeexpenseswere$134.2million,or9.3%ofrevenuesfor2013,ascomparedto
$131.6million,or 9.8% ofrevenuesfor2012.Thedecreaseasapercentage ofsaleswasprimarilythe
resultofleveragefromhighersales.Additionally,2012includedapproximately$3.3millionrelatedtothe
previously discussed Agne text messaging class action, which increased the 2012 general and
administrativeexpensespercentagebyapproximately0.2%.