A Papa John's International investor conference call on Feb. 27 revealed that leadership at the Louisville, Ky., firm is working to correct a flat-to-negative sales trend that began last fall.
Executives at the number-three pizza chain said the company is testing chicken wings in a limited number of U.S. markets, and will run a systemwide test of a six-cheese pizza and a spinach and Alfredo sauce pizza on March 4. That trial will conclude at month's end, at which time the company will decide whether to continue those offerings.
According to published reports, Mary Ann Palmer, chief resources officer at Papa John's, said changing consumer tastes led the chain to consider more upscale products, such as the two pizzas. Its six-cheese pizza, for example, will feature Asiago, Parmesan, smoked provolone, fontina, Romano and mozzarella.
During the same call, CEO John Schnatter discussed the company's current slow sales, citing aggressive price competition and growth in the frozen pizza market as reasons behind the negative numbers. Schnatter also blamed his company for not executing well at the store-level and not retaining patrons. According to Dow Jones Newswires, Papa John's founder said, "We're getting good trial ... (w)hat we're not doing is keeping the customers."
Papa John's does seem to be pleasing investors, however. On Feb. 26, it reported 2001 full-year earnings per share of $2.08, 18 cents above 2000. As recently as Feb. 5, its stock (PZZA: NASDAQ) traded at a 65-day high of $28.66, but had dipped to $23.37 by Feb. 27. The next day it was on the rebound, rising more than 12 percent and trading above $26.