Papa Murphy’s Holdings Inc. said Wednesday it has hired North Point Advisors to evaluate strategic alternatives, including a possible sale of the take-and-bake pizza chain.
The announcement was made with the release of third-quarter earnings indicating a systemwide same-store sales decline of 2.1 percent for the Oct. 1-ended quarter, including a 1.8-percent decrease at global franchised units and a 6.9-percent decline at company-owned stores.
The company reported a net loss of $0.6 million, or 4 cents per share, compared with a loss of $2.7 million, or 16 cents per share, a year ago. Revenues were $28.8 million for the quarter, compared to $33.7 million in the third quarter of 2017, primarily as a result of the refranchising of 29 units and closure of six company-owned stores since Oct. 2, 2017.
Weldon Spangler, CEO of the Vancouver, Wash.-based chain, said sales trends were improving in the early fourth quarter.
“While the third-quarter same-store sales percentage is still negative, the third-quarter result represents our best percentage change in same store sales in 12 quarters,” he said in a statement. “We are also pleased to note that sales trends have continued to improve and are currently tracking slightly positive through the first five weeks of the fourth quarter, though we maintain a conservative outlook for the balance of the fourth quarter. The comp sales result continues to be driven by the adoption of key marketing messages, as well as by progress on our strategic initiatives.”
The decision to look at strategic alternatives comes in conjunction with a comprehensive review of the pizza chain’s business strategy, the company said.
“Financial and strategic alternatives may include, but are not limited to, a possible sale of the business,” the company said in a statement. “There is no specific timetable for identifying potential transactions or transaction candidates and there is no assurance that any transaction will be completed.”
Papa Murphy’s also extended its credit facility to Aug. 28, 2020.
For the full year, the company expects systemwide same-store sales to decline in low-single digits.
Papa Murphy’s currently has about 1,460 units.
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