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Papa John’s terminates NFL sponsorship

Papa John’s terminates NFL sponsorship

Pizza chain to continue relationship with 22 individual teams

Papa John’s International Inc. has terminated its official sponsorship of the National Football League, the pizza chain’s new CEO, Steve Ritchie, said in a conference call announcing fourth quarter and annual earnings. 

Papa John’s had been an official sponsor of the NFL since 2010, and it will continue partnership with 22 specific football teams as well as popular personalities within the league, Ritchie said.

The announcement came as the 5,199-unit chain announced a domestic same-store sales decrease of 3.9 percent.

Former CEO and current founder and chairman John Schnatter sparked controversy during Papa John’s previous conference call Nov. 1 when he blamed the chain’s decline in sales on the NFL not quelling players’ on-field protests.

Ritchie, who had been the company’s president since 2015, became CEO as of Jan. 1, 2018.

The new CEO said the company would also refocus its marketing to highlight the superior quality of Papa John’s pizza, re-emphasizing the chain’s tagline of “Better Ingredients, Better Pizza.”

With research indicating that some customers who liked Papa John’s sometimes ordered other pizza because they thought competitors were less expensive, Ritchie said the chain’s new advertising firm — Laundry Service, which was hired in late October — would start with a “clean slate” in repositioning the brand and with new value messaging.

He cautioned that results of those changes would likely not be seen until the second half of the year.

“To be clear, it is not business as usual at Papa John’s,” he said.

In a press release announcing the fourth quarter and fiscal 2017 results, Ritchie said, “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. Actions are underway to improve our brand proposition, how we connect with customers, and how we operate at the unit level.”

In the conference call, he said that would include the largest investment in technology in the company’s history as well as new marketing positioning. Additionally, without going into details, he said the company was considering new lines of entrées, desserts and beverages.

He said the chain’s pan pizza launched over a year ago was performing well, as were some sides and desserts that had been introduced.

Revenue for the quarter was $467.6 million for the quarter ended Dec. 31, up from $439.6 million a year earlier. For the year, revenue was $1.78 billion, up from $1.71 billion.

Net income for the quarter was $28.5 million or 81 cents per share, down from $32.6 million, or 88 cents per share.

For the year, net income was $102.3 million, down from $102.9 million in fiscal 2016.

Domestic same store sales for the year were up by 0.1 percent. International same store sales were up by 2.6 percent for the quarter and 4.4 percent for the year.

The Louisville, Ky.-based chain closed a net 274 restaurants over the course of the year, of which 119 were in North America. It ended the year with 3,441 restaurants in North America, of which 708 were domestic company-owned restaurants.

Correction: March 2, 2018 An earlier version of this story misstated Papa John's net income for the 4th quarter of 2017, which was $28.5 million.

Contact Bret Thorn at [email protected] 

Follow him on Twitter: @foodwriterdiary

Correction: February 28, 2018
An earlier version of this article misstated Papa John's advertising agency. It is Laundry Service.
TAGS: Finance
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