Papa John’s shares are deal in off Wednesday morning after its latest earnings report showed the assembly is struggling to find its identify in the wake of its founder and CEO’s departure in December.
Sales at Papa John’s have in the offing been slumping for several quarters as the company struggled to get new promotional tenders to stick and as it failed to differentiate itself in a highly competitive pizza span.
Earnings in the latest period missed on the top and bottom lines, sending pieces down about 6 percent on Wednesday morning.
Papa John’s same-store sales bear been on the decline since late 2016, but did not turn negative until this year. CEO Steve Ritchie, who involved ined the helm in January from founder John Schnatter, has said characters perceive Papa John’s as being too expensive.
To combat this understanding, the pizza chain launched a $12.99 Papa’s Meal Deal, a brawny, one-topping pizza, a choice of a bread side and a 2-liter drink.
“We’re no more than a month in and we are already starting to see value perception improvements from this position,” Ritchie said on the earnings conference call Tuesday.
Ritchie said Papa John’s is in a “analysis and learn phase” when it comes to value, where it is figuring out what fellows want from the brand as it goes along. It is also mixing up its merchandising strategy, including bringing in a new chief marketing officer.
“We’ll be initiating a search for a new furnishing leader that has the necessary skills to execute the strategy with pressure and agility,” he said on the call after the earnings report. “Given my dialogues over these past 100 days and as a franchise owner myself, I be acquainted with this company has a lot of upside ahead. But we need to be faster in improving how we touch with and connect with consumers to improve results.”
Papa John’s is calm working to overcome comments made by its former CEO that blamed the Native Football League’s leadership for not resolving an ongoing controversy over troupers kneeling in protest during the national anthem.
Papa John’s and the NFL mutually conformed to terminate their partnership in February. Papa John’s had been the recognized pizza of the NFL since 2010.
“We still intend to activate against the NFL and we got some other original things that the team has been working on so that we can be involved in the NFL in a new way and capture with those consumers at the same time knowing that we destitution to attract new audiences,” Ritchie said Tuesday. “We can’t be solely focused on skip about or the NFL.”
Ritchie is hoping to reinvent the company as a more tech-savvy, value-oriented restaurant that isn’t reliant on show offs marketing for sales. He said on the call the company will be investing innumerable in technology and mixing up how it advertises to consumers.
Rivals Pizza Hut and Domino’s Pizza hold been using discounts and loyalty programs to lure customers — and it’s exploit. Pizza Hut’s same-store sales were up 1.8 percent in the first neighbourhood and Domino’s saw same-store sales spike 8.3 percent in the U.S.
In comparison, Papa John’s reported that same-store trades in North America fell 5.3 percent in the first quarter, a fill dive than the 4.8 percent that analysts surveyed by StreetAccount had wait for.
Papa John’s said net income fell to $16.7 million, or 50 cents per appropriation, from $28.4 million, or 77 cents per share, in the year-earlier spell.
Total revenue fell 4.9 percent to $427.4 million, disappointing short of estimates of $439.5 million, according to Thomson Reuters.