LOUISVILLE, Ky. -- John Schnatter, president, CEO and founder of Papa John's International, predicts his company will reach the 3,000-store mark by the end of next January.
And on the day that magnificent milestone is reached, Schnatter, a well-known hard worker, will take the day off -- along with the rest of the company's Louisville, Ky., headquarters staff.
"It's something the whole team should be proud of. I'm certainly proud of them," Schnatter told Business First. "Less than 15 restaurant (restaurant) companies reach 3,000 stores and do $2 billion a year in sales."
The company officially became the nation's number-three pizza chain in 2000, when its annual sales surpassed Detroit-based Little Caesars'. Industry tracker Technomic estimates Papa John's $1.7 billion in sales accounts for almost 7 percent of the U.S. ready-to-eat pizza market. By comparison, the market leader, Pizza Hut, has a 20 percent share, and Domino's Pizza, the number-two chain holds nearly a 10 percent share.
That the company should reach such lofty heights is good news in an industry suffering amid the country's recession. A protracted price war between pizza companies has fixed average pie prices below $10 for almost three years and reduced profits along the way. Additionally, operators have battled exceptionally high cheese prices two of the last three years. Schnatter also told Business First he believed increasingly strong competition from frozen grocery store pizzas was taking a bite out of the market.
As of Sept. 30, 16-year-old Papa John's International included 2,917 total domestic and international pizza stores: 2,722 under the Papa John's banner; and 195 Perfect Pizza stores in England. Of those stores, 636 are company owned, and 2,281 are franchised. One of the industry's fastest growers throughout the 1990s, when it averaged about 400 new stores a year, the company expects to open about 250 this year. For 2002, Papa John's plans to grow store total store numbers by 3 to 5 percent.
Despite this year's challenges, the company expects to record earnings in 2001 of $2.08 per share, a 9.5-percent increase over last year. Next year it predicts EPS to reach a range of $2.15 to $2.25.
When markets closed on Monday, the company's stock (NASDAQ: PZZA) traded at $25.19 a share.