Pizza

Papa Murphy's same-store sales fall 4%

Take-and-bake chain cites competitive market for sales woes

Papa Murphy’s Holdings, Inc. turned around a net loss of $1.4 million, or 9 cents per share, to net income of $952,000, or 6 cents per share, even as same store sales fell by 4 percent compared to the second quarter of 2015.

Revenue for the take-and-bake pizza chain was up by 2.7 percent to $29.9 million for the second quarter of 2016, which ended June 27.

The Vancouver, Wash-based chain opened 28 new stores during the quarter, all in the United States.

“We continued to face top-line challenges throughout the second quarter as a result of an increasingly competitive landscape,” president and CEO Ken Calwell said in a press release announcing the quarterly earnings, “including significantly more aggressive value offerings across pizza and other foodservice, lower seasonal and absolute media levels, and the impact from our first quarter marketing shift to promote online ordering that extended into the early part of the second quarter.

“In spite of the near-term challenges, we continue to believe that our strategies are on point and will drive long-term top line growth and profitability,” he added.

He said the company had opened 53 units so far in the fiscal year — 17 units more than the first half of 2015. He attributed the accelerated growth to changes made in the franchising model in the second half of last year that lowered the cost and speeded up the process of building franchises.

Going into the second half of the year, Calwell said the chain’s marketing strategy would focus on “traditional pizza offerings sharply focused on value and product innovation with a secondary focus on acquiring new customers and migrating existing customers to online ordering.”

The company closed out the quarter with 156 company-owned restaurants, 1,375 domestic franchised restaurants, and 39 international locations.

Contact Bret Thorn at [email protected]
Follow him on Twitter: @foodwriterdiary

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