Board member Jean Birch will become chairman on Sept 30See full article gtgt Papa Murphy’s

Papa Murphy’s expands delivery test

Two markets added in 2Q as same-store sales slip

Papa Murphy's Holdings Inc. added two markets to its delivery test in the second quarter as its same-store sales slipped, executives said Wednesday.

The Vancouver, Wash.-based company said the 4.3 percent decline in same-store sales included a 4.1 percent decrease at domestic franchised locations and a drop of 6.6 percent at company-owned units.

“During the quarter, we continued to make progress on several key strategic initiatives designed to drive sales and profitability at the store-level,” said Jean Birch, Papa Murphy’s board chair and former interim CEO, in a statement.

“We expanded our delivery pilot to two additional markets, added a new third-party partner and began executing the transition of our e-commerce platform to Olo,” said Birch, who stepped down from the interim CEO position July 17 to be succeeded by Weldon Spangler.

Birch said Papa Murphy’s anticipates speeding up its efforts to sell company-owned locations to franchisees.

“We are accelerating our refranchising efforts and now expect to refranchise up to 35 units this year,” Birch said. The company had earlier said it planned to refranchise at least 15 locations this year.

“We believe that through successful execution against these strategies, along with the leadership of Weldon Spangler, our new CEO, we can return this business to sustained growth and profitability,” Birch said.

During the second quarter ended July 3, Papa Murphy’s refranchised seven owned stores, the company said. In addition, franchisees opened 13 new stores in the quarter, including 11 domestically.

As the company works toward increasing its franchise base, it has been selling underperforming company-owned stores. Earlier this year, it announced plans to shutter as many as 16 by the end of the year. 

For the second quarter, the company swung to a loss of $6.2 million, or 37 cents a share, from a profit of $952,000, or six cents a share, in the same period last year. Revenues fell 2.6 percent, to $29.1 million from @29.9 million in the prior-year quarter. 

As of July 3, Papa Murphy’s had 1,550 locations, with 149 of those company-owned. That includes 43 international locations.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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