LOUISVILLE, Ky. (WDRB) – Papa John’s International’s domestic sales were down for the seventh-straight quarter, according to results reported Tuesday, but CEO Steve Ritchie said there are signs that sales “are in the early stages of stabilizing and turning around.”
Comparable sales at restaurants in the U.S. and Canada – the company’s most-watched metric -- were down 5.7% in the April-June period from a year earlier, the Louisville-based pizza chain said. The results were about on par with what Wall Street analyst expected.
Ritchie noted that quarterly sales declines have been moderating since the 9.8% plunge in July-September 2018, when company founder and then-chairman John Schnatter admitted using a racial slur during a media training exercise.
That dark period when Schnatter was the focus will be the basis for gauging the company’s performance in current quarter. Ritchie said the company should return to sales growth when comparing the second half of 2019 to the tumultuous second half of 2018.
The company said it still faces “consumer sentiment challenges” stemming from the bad publicity involving Schnatter.
But Mike Nettles, Papa John’s chief operating and growth officer, said the YouGov Brand Index, the company’s internal loyalty program and other data sources suggest the customers feel more positively about Papa John’s than a year ago.
“It’s a pretty resounding, ‘things are improving’ … A lot of our efforts are starting to be rewarded,” he told analysts on the company’s conference call Tuesday.
Papa John’s plans a big advertising push centered on former NBA star Shaquille O’Neal, who inked an $8 million endorsement deal with the company and joined its board of directors earlier this year.
“We are very excited to get him off the bench and into a new, national advertising campaign this fall,” Ritchie said.
The company has also been testing new menu items and “value” oriented discounts in about a quarter of its restaurants. That has included a $6 medium pizza to draw customers in and a series of $12 specialty pies.
“We do have some real confidence around our ability to continue to improve sales,” Ritchie said.