What happened

Shares of Papa John's Int'l Inc. (NASDAQ:PZZA) were jumping today after the pizza delivery chain reported second-quarter earnings and announced an aggressive share-buyback program.

As of 3:16 p.m. EDT, the stock was up 11.6%.

A pizza deliveryman rings a doorbell.

Image source: Papa John's.

So what

The pizza purveyor reported modest comparable-sales growth of 1.4% in North America and 3.9% internationally, while total revenue increased 2.8% to $434.8 million, which missed expectations of $439 million. On the bottom line, earnings per share increased from $0.61 to $0.65, topping estimates by a penny.

Results like that wouldn't normally send a stock flying, but investors cheered a plan to buy back $500 million worth of stock, which alone would lift earnings per share by about 20%. The company also said that over the next 12 to 18 months, as it borrows to fund the buybacks, its debt-to-EBITDA ratio would expand to between 3 and 4, from about 1.3 today.

CEO John Schnatter said Papa John's "delivered solid results in the quarter" as it marked the 27th straight quarter of comparable-sales growth and 29th internationally. He added, "Our industry-leading quality and digital platforms, such as our launch of Facebook instant ordering, will continue to drive the consistent growth of the Papa John's brand globally."

Now what

Papa John's continues to trail its larger rival Domino's Pizza in growth and performance, but Papa John's shares have nonetheless done well. Demand for delivery is increasing as Americans shift to a stay-at-home, on-demand economy, which should continue to drive comparable sales higher. With the boost from the share buybacks, I'd expect Papa John's to continue to outperform the broader market, despite tepid growth in the recent quarter.

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