New Papa John’s CEO Steve Ritchie said the company will alter its public relations and marketing plan, including ending its NFL sponsorship, in an effort to shift negative consumer sentiment that drove down sales at North American stores at the end of last year.
“We mutually agreed to ending our sponsorship,” said Ritchie, who also is president of Papa John’s. The company will still advertise with NFL teams and players, he said, but plan to diversify beyond the NFL.
Papa John’s faced backlash in November after founder John Schnatter blamed a controversy within the NFL for his company’s declining domestic sales, suggesting the owners and NFL leadership should have stopped players from protesting racial inequality.
Less than two months later, Schnatter relinquished the role of CEO, but he remains board chairman. He didn’t take part in the earnings call with analysts Tuesday.
Same-store sales at North American stores declined 3.9 percent decline during the fourth quarter of 2017, according to the company’s earnings.
“These results in North American are not acceptable to us,” Ritchie said.
Ritchie stated in the earnings release that the company expects to see improvement in sales later in 2018.
“We know our potential is so much greater than our results, and we are taking significant steps to reinvigorate our record of profitable growth and value creation,” Ritchie said. “Actions are underway to improve our brand proposition, how we connect with customers, and how we operate at the unit level. These actions build on all the strengths of the Papa John’s brand and include a fresh perspective around marketing driven by new media and creative partnerships, hiring a new PR partner, and bringing online a new engine to drive our Papa Rewards loyalty system.”
Papa John’s overall revenues were up slightly to $1.78 billion in 2017 from $1.71 billion in 2016. Adjusted earnings per share increased 3 percent, to $2.62 per share, during the year.
Same-store sales continued to increase at international stores, rising 4.4 percent in 2017 compared to the prior year.
Operating income at domestic company-owned restaurant declined $6.1 million, a result of negative same-store sales, higher commodities prices, and higher vehicle and workers’ compensation insurance costs, according to Papa John’s earnings release.
Papa John’s stocks closed Tuesday at $56.36, down 1.6 percent.