Papa Johns Sees Sales and Traffic Pressure, but Transformation Remains on Track

Papa Johns reported another quarter of negative same-store sales in the first quarter, but CEO Todd Penegor and his team aren’t panicking. The brand knows it’s navigating a complicated macroeconomic environment and is faced with balancing near-term pressure on transactions with a longer-term transformation plan based on innovation, value, and operational discipline. And that’s regardless of what its pizza peers may be doing. “Although certain competitors have outlined their strategy to compress restaurant margins in the sector, we are taking a disciplined approach, executing a balanced transformation that extends well beyond price, meeting customers where they are while improving four-wall margins, elevating our fleet and supporting our franchisees to build this business for the long term,” he said. That balance is being tested in North America, where same-store sales declined 6.4 percent in the first quarter, driven primarily by lower transaction volumes. Fewer new customers are entering the system, even as core users remain engaged. The chain’s North America comps have been negative for eight of the past nine quarters. Papa Johns reported flat year-over-year pizza volumes excluding weather impacts, with customers ordering more pizzas per transaction. Additionally, pies per order increased 5 percent versus last year. The traffic loss is coming from fewer guests ordering one or no pizzas. READ MORE: Papa Johns Plans 300 Store Closures, Corporate Layoffs Amid Turnaround Efforts How Papa Johns is ‘Managing the Moment,’ and Thinking Ahead Papa Johns’ Core-Product Focus Boosts Sales and Transactions To address this, Papa Johns is leaning heavily into…

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