Papa John’s Sales Fall for Fourth Consecutive Quarter
Papa John’s International Inc. reported a fourth consecutive quarter of declining sales, adding pressure on the pizza chain to try to revive its business in ways that could include a sale of the company.
Same-store sales in North America fell 9.8% in the third quarter, beating expectations of a 10.8% decline. Shares rose 3.5% in after-hours trading on Tuesday.
Several potential buyers have expressed interest in acquiring Papa John’s,according to people familiar with the matter.
Activist shareholder Legion Partners Asset Management LLC and the California State Teachers’ Retirement System last month disclosed a 5.5% stake in Papa John’s. Legion has spoken with the company about adding board members with restaurant experience, restoring the morale of franchisees and employees and cutting costs.
The company has been struggling since late last year, when founder John Schnatter first made comments that many customers construed as racist. Last November he defied the board and publicly blamed slowing sales growth on the National Football League’s handling of its players’ national anthem protests.
Many people took Mr. Schnatter’s criticism of the NFL, of which Papa John’s was a major sponsor, to mean that he disapproved of the protests, which are intended to call attention to police brutality, particularly in African-American communities.
He stepped down in December as CEO of the pizza delivery business he founded in 1984. After news leaked in July that he had said the “N” word during a marketing call, he stepped down as chairman. The company has since removed Mr. Schnatter from its advertisements and has adopted a poison pill to prevent him from gaining control of the company. Mr. Schnatter, who remains on the board and owns nearly 31% of the stock, has blamed the company’s poor performance on his successor as CEO, Steve Ritchie.
Papa John’s posted a quarterly loss of $13 million, or 41 cents a share, versus a profit of nearly $22 million, or 60 cents a share in the year-ago period. Overall revenue in the quarter ended Sept. 30 dropped nearly 16% to $364 million.
Papa John’s International Inc. reported a fourth consecutive quarter of declining sales, adding pressure on the pizza chain to try to revive its business in ways that could include a sale of the company.
Same-store sales in North America fell 9.8% in the third quarter, beating expectations of a 10.8% decline. Shares rose 3.5% in after-hours trading on Tuesday.
Several potential buyers have expressed interest in acquiring Papa John’s,according to people familiar with the matter.
Activist shareholder Legion Partners Asset Management LLC and the California State Teachers’ Retirement System last month disclosed a 5.5% stake in Papa John’s. Legion has spoken with the company about adding board members with restaurant experience, restoring the morale of franchisees and employees and cutting costs.
The company has been struggling since late last year, when founder John Schnatter first made comments that many customers construed as racist. Last November he defied the board and publicly blamed slowing sales growth on the National Football League’s handling of its players’ national anthem protests.
Many people took Mr. Schnatter’s criticism of the NFL, of which Papa John’s was a major sponsor, to mean that he disapproved of the protests, which are intended to call attention to police brutality, particularly in African-American communities.
He stepped down in December as CEO of the pizza delivery business he founded in 1984. After news leaked in July that he had said the “N” word during a marketing call, he stepped down as chairman. The company has since removed Mr. Schnatter from its advertisements and has adopted a poison pill to prevent him from gaining control of the company. Mr. Schnatter, who remains on the board and owns nearly 31% of the stock, has blamed the company’s poor performance on his successor as CEO, Steve Ritchie.
Papa John’s posted a quarterly loss of $13 million, or 41 cents a share, versus a profit of nearly $22 million, or 60 cents a share in the year-ago period. Overall revenue in the quarter ended Sept. 30 dropped nearly 16% to $364 million.
