Reuters: Papa John's asks for takeover bids

LOUISVILLE, Ky. (WDRB) – Papa John’s International’s recent high-profile moves – from landing a big investment from a hedge fund to signing Shaquille O’Neal as a spokesman – aren’t immediately paying off for Louisville-based pizza chain.

The company on Tuesday reported a sales decline of 6.9% in its key North America division during the January – March period. The decline was a bit steeper than the 6.3% that Wall Street analysts expected, according to FactSet.

CEO Steve Ritchie said there are optimistic signs, including that franchisees in the U.S. and Canada opened about the same number of stores as they closed in the quarter, and that same-store sales declines in February and March were not as sharp as the 10.5% decline in January.

Ritchie said he expects further sales improvement in April-June period, though he cautioned it may not be a “material” change. The company didn’t change its prediction that 2019 sales will be down by 1% to 5%.

“It is going to take some time to get the overall sales moving in the right direction,” Ritchie told analysts on a conference call.

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While consumers’ opinion of Papa John’s is improving, the company’s data show “consumer sentiment” is still more negative than before November 2017, Ritchie said, a reference to bad publicity following founder and former CEO John Schnatter’s criticism of the NFL’s handling of the 2017 National Anthem protests.

Ritchie added that consumer opinion remains hampered after the “significant” event last summer when Schnatter admitted to using racial language during a private business call.

After agreeing to give up his board seat and withdraw a lawsuit against the company, Schnatter said in a securities on Monday that he is considering selling some or all of his 31% stake in Papa John’s.

Papa John’s booked a net loss of $1.7 million in the quarter as revenue tumbled 11% to $398 million.

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Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2019 WDRB News. All rights reserved.

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Chris Otts reports for WDRB.com about business and economic topics, higher education and local / state government. He joined WDRB News in 2013 after seven years with The Courier-Journal. Got a tip? Chris is at 502-585-0822 and cotts@wdrb.com.