STRATEGIC PARTNERS
August 7, 2019
Papa John's is still struggling to catch up, as the brand reported earnings that missed expectations, despite more sales than anticipated. Second-quarter financial results for the Louisville, Kentucky-based brand showed revenues reached $399.6 million, or more than $5 million over what Bloomberg had estimated.
The results filed Tuesday with the Securities and Exchange Commission indicate that comp sales for the period in the North America fell 5.7% from April to June this year, compared with the same period a year ago.
Other key Q2 highlights for the three- and six-month periods ending June 30, include:
Papa John's President and CEO Steve Ritchie remained encouraged, however, telling investors during a conference call that the chain appears to be stabilizing some from the free-fall it took following fallout from a number of poorly received public comments made by its founder John Schnatter over the last two years.
"Papa John's made strong progress in the key pillars of its strategy in the second quarter, recording another sequential improvement in comparable sales," Ritchie said. "In addition to adding a highly experienced chief restaurant operations officer, we announced a significant, multi-quarter investment in the brand and our franchise system from Starboard's investment earlier this year. The table is now set as we begin rolling out our new marketing campaigns and menu items in the second half of the year."
For the three and six months ended June 30, 2019, the company also reported that it incurred $5.4 million and $21.2 million of special costs related to the circumstances it now faces in the category, as well as its turnaround initiatives, it reported.
In July 2019, the company also announced it would make an $80 million investment in marketing and brand initiatives as well as provide scheduled financial assistance for traditional North America franchisees beginning in the third quarter of 2019 through 2020.
