Economy

Papa John's to shell out up to $50M to remake its image

Papa John's to shell out up to $50M to remake its image

In a statement to CNBC after the earnings release, Schnatter said: "As I communicated to the board as early as December 2016 and several times in 2017, I am seriously concerned about the company's declining sales, financial performance and, most importantly, the direction the company headed under the stewardship of Steve Ritchie and the current board of directors".

"Instead of addressing the real and fundamental issues. the company is trying to deflect attention from the source of the problem - management's ongoing failures with regard to financial performance - and blame me for its problems", Schnatter said.

"We are working to show that our future will not be defined by the words and actions of one person", Ritchie said, placing the blame exclusively on Schnatter's shoulders.

Then, for July, the drop steepened to 10.5 percent at established North American locations, the company said Tuesday.

Schnatter would admit the remark and apologize, but later say his words were taken out of context and that he regrets giving in to pressure step down as chairman of the company's board.

For the year, Papa John's now expects sales to fall 7 percent to 10 percent at established North American locations. And of course, the images of that one person it depended on for so long are hastily being wiped from marketing materials such as pizza boxes and logos.

Papa John's shares are down more than 20% so far this year.

More news: Sterling falls as dollar rebounds, United Kingdom minister says no-deal Brexit likely

Putting aside things the company is working on - including changing pricing after doing a study at every one of its USA restaurants, a third-party audit of company culture, possible discussions with lenders, its possible financial assistance for franchisees, such as short-term reductions in royalty payments, to keep them from shutting down, and its partnership with DoorDash to expand delivery to zones restaurants don't cover - there's a lot to be done to fix the brand.

Papa John's has banned Schnatter from all media appearances and enacted a "poison pill" measure to prevent Schnatter from acquiring a controlling stake in the company. And Ritchie used two of the industry's buzzwords, saying the brand needs to do better to reach, that's right, millennials and Gen Z.

Other headwinds included higher commodity and wage costs and the re-franchising of Papa John's stores in China, which resulted in a $1.6 million loss during the second quarter, the company reported. Schnatter initially drew scrutiny last November when, while still serving as Papa John's CEO, he blamed a sales decline on the company's relationship with the NFL and its handling of player national anthem protests. A $12.99 bundle didn't help sales much in the second quarter. He said in a statement that he is 'not going away'. "Accessible value does have an important role to play", he said. For now, Ritchie is overseeing marketing, as he has been since the May departure of short-tenured CMO Brandon Rhoten.

"Sometimes the greatest opportunities happen in the most inopportune times. We have also begun an external audit of Papa John's culture and will address any improvements that are recommended at its conclusion".

Schnatter stepped down as Papa John's CEO last January.

Revenue was down by 6.2 percent to $408 million and net income fell by just under 50 percent to $11.8 million, or 36 cents per share, down from $23.5 million, or 65 cents per share in the quarter ended June 25, 2017.


  • Doctor 'satisfied' with Lauda condition

    Doctor 'satisfied' with Lauda condition

    In 1976, Lauda was involved in a huge crash as he went into an embankment at the Nurburgring circuit in Germany. "During the following days his condition has further improved continuously".
    Redesigned Snapchat sees users drop by 3 million for quarter

    Redesigned Snapchat sees users drop by 3 million for quarter

    Snapchat is popular for private messaging, but most of the ads Snap sells accompany videos that are shared with a wider audience. But the change has made it more hard for Snapchat to distinguish itself from other video-heavy apps and draw premium prices.
    Reported Liverpool target Leon Bailey's emphatic response when asked about his future

    Reported Liverpool target Leon Bailey's emphatic response when asked about his future

    Manchester City have expressed an interest in signing Bailey, while Bayern Munich submitted a £53m offer to Leverkusen in May. Bayer Leverkusen have slapped a €50 million price-tag on Leon Bailey , a player reportedly being watched by Liverpool .
  • Oil rallies as Iran sanctions kick in

    Oil rallies as Iran sanctions kick in

    But new data released on Monday showed Saudi Arabia's oil production fell in July by 200,000 bpd from the month earlier. Mr Trump's sanctions follow the withdrawal of the United States from the Iran nuclear deal earlier this year.
    Severe thunderstorm watch ends for P.E.I.'s Prince County

    Severe thunderstorm watch ends for P.E.I.'s Prince County

    Strong wind gusts can toss loose objects, damage weak buildings, break branches off trees, and flip large vehicles. A Flash Flood Watch is in effect through Tuesday night for areas near Colorado Springs and to the south.
    Lucas Perez: West Ham close to signing of Arsenal's Spanish forward

    Lucas Perez: West Ham close to signing of Arsenal's Spanish forward

    Arsenal have accepted a bid from Sporting Lisbon to sign Lucas Perez this summer, according to reports in the Portuguese media. . The Spaniard returned to the Riazor on loan last season but failed to impress as Depor were relegated to the Segunda Division.
  • Annual Perseid Meteor Shower Coming This Weekend

    Annual Perseid Meteor Shower Coming This Weekend

    During the shower, you can expect to see around 70 meteors per hour, breaking it down to about one meter per minute. The Perseids' appear every year as the Earth passes through the debris cloud of the Comet Swift-Tuttle.
    Indonesian rescuers struggle to reach cut-off villages after deadly quake

    Indonesian rescuers struggle to reach cut-off villages after deadly quake

    It was also felt strongly in the neighbouring Bali, a predominantly Hindu island in the world's largest Muslim majority nation. It was a rare moment of joy since the quake struck, killing at least 98 people , including two on nearby Bali Island.
    Pogba becoming increasingly frustrated at Manchester United

    Pogba becoming increasingly frustrated at Manchester United

    Pogba is now tempted to leave United for Barça - and it now seems clear that Mourinho is one of the main reasons why. United shut down Barcelona's approach and have refused to entertain the prospect of Pogba leaving.
  • Samuel L. Jackson Will Be Back For SPIDER-MAN: FAR FROM HOME

    Samuel L. Jackson Will Be Back For SPIDER-MAN: FAR FROM HOME

    How all of this plays out onscreen is still anyone's guess, but if you dig Jackson as Fury, get ready to see a lot more of him. As for the Spidey sequel, it would appear that we're looking at a stacked cast indeed.
    Third time unlucky for the Lions - 05-Aug

    Third time unlucky for the Lions - 05-Aug

    Last year, when they were not expected to win in Johannesburg, he was elated but winning at home on Saturday was different. Again the Crusaders responded immediately after the Lions interrupted a prospective move by putting the ball into touch.
    MCU Movies to Move from Netflix to Disney's Streaming Service

    MCU Movies to Move from Netflix to Disney's Streaming Service

    This service will rival Netflix, though Iger has said in the past that it will cost "significantly less" than Netflix. In the final minutes of trading on Tuesday, shares hit $116.56, an increase of nearly 10 percent from a year ago.