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Papa John's still has a pizza problem.
John Schnatter, the founder and public face of the company, resigned from his position as president and apologized for using the N-word during a conference call . must face a terrible decline in sales. He loses pizza from Pizza Hut and Domino's.
Earlier this decade, Papa John's was gaining market share against his competitors, said Chris O. Cull, an analyst at Stifel.
But a few years ago, customers started to pay more attention to the price. Pizza Hut has started offering more aggressive promotional offers. Domino & # 39; s, the industry leader, has been offering offers for years. After years spent selling quality products, Papa John's could not change gear
"Dad John's never really competed with a valuable message "said O & # 39; Cull
. Growth started to slow down.
Papa John reported late last year that same – store sales were up only 1%, a net slowdown from the previous year.
Schnatter blamed the NFL's reaction. injustice. It only made things worse.
The comments elicited a negative reaction on social media, and Papa John had to distance himself from neo-Nazi groups. The company has finally ended its partnership with the NFL. O & Cull said:
In the last three months of 2017, same-store sales in North America decreased 3.9%. % Steve Ritchie, who replaced Schnatter as CEO in January, pledged to boost sales by reshaping the company's marketing efforts, lowering prices, increasing digital sales through sales channels, and improving sales. an increase of 5.3%.
Now he must also deal with Schnatter's fallout.
On Wednesday, Schnatter apologized and resigned from his presidential post after Forbes reported that he had used the word N in May while he was participating in a gambling exercise. role designed to prevent public relations crises.
Wall Street responded well Thursday. Schnatter remains in the board of directors and holds nearly 30% of the shares
and its release could still cause problems to the company, especially with marketing and advertising, said the company. BTIG analyst. Peter Saleh. The marketing director of the company left his position in May after just one year of work. And Schnatter has been the face of the business for more than a decade.
"The big question will be whether they bring it back into advertising or branding," said O & Cull.
This seems unlikely, at least in the short term. The Baseball Marlins ended a promotional partnership with Papa John on Thursday and called Schnatter's comments "derogatory and unfeeling."
Neither do we know who will help Papa John to go ahead. Laundry Service, a marketing agency that had worked with the company, was on the conference call in May and moved to terminate its contract with Papa John's, Forbes reported.
Laundry service refused to comment. Dad John's not immediately responded to a request for comment
"Lack of agency … would seem to leave marketing efforts in disarray," wrote Saleh in a note. Wednesday.
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