Papa John’s CEO Steve Ritchie tells Yahoo Finance he still sees the brand returning to sales growth later this year.
In short, thank you in advance NBA hall of famer and newest Papa John’s (PZZA) board member Shaquille O’Neal.
The pizza chain — which continues to battle through brand perception issues following racially insensitive comments made by its founder John Schnatter in 2018 — said Tuesday after the close of trading that North America same-store sales fell 5.7% in the second quarter. The North America sales decline marked an improvement from a 6.7% drop in the first quarter as Papa John’s offered more pizza promotions and rolled out several new flavors. International same-store sales rose 0.3%.
On an adjusted basis, Papa John’s earnings of 28 cents a share missed analyst forecasts by 2 cents.
Papa John’s shares rose slightly in after-hours trading.
“It was a bridge quarter,” Ritchie says, explaining the company has spent the last three months rebuilding its executive team, and marketing and product plans for the balance of 2019. Ritchie tells Yahoo Finance Papa John’s will debut a new marketing plan across TV and digital featuring Shaq — who was added to Papa John’s board in March — in the fall. It has also begun testing in certain markets a Shaq-inspired food offering dubbed the ‘Papadia’ (see video below) for $5.
The company has also started to test several price points to see what gets people back into the stores: side items for $4, a $5 pizza and a value bundle for $25.
“It’s absolutely critical we get back to sales growth in the second half,” Ritchie says, adding he envisions sales growth returning this year and then continuing into 2020 and beyond.
Papa John’s once again reiterated its 2019 earnings guidance of $1 to $1.20 a share. The company narrowed its projected full year drop in North America same-store sales to 1% to 4%, from 1% to 5% previously.