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Thursday
Aug082019

Papa John's 2Q19: Key Points

  • 2Q19 comps declined -5.7%, representing the 3rd quarter of sequential improvement in comp sales. Consumer sentiment challenges that the brand has faced over the past 12 months are now in the early stages of stabilizing & turning around. The full turnaround is expected to take 18 month.
  • Corporate contributed an incremental $2.5MM to the marketing fund during 2Q & $40MM of Starboard’s strategic investment (made in 2/19) will be evenly re-invested in marketing during 2H19 & 2020.  Also, the system will incorporate a 25 bps increase in its National Marketing Fund contribution rate to 5% of restaurant sales in 2020. This will provide 6 quarters of increased marketing dollars to support the intro of its new brand ambassador, Shaquille O'Neal.
  • While the brand’s value messaging has been around the $6 medium price point during 1H19, the system has been testing a multi-tier price point value construct in 25% of the stores (combining premium specialty pizzas alongside accessible price points for pizzas of 3 different sizes). The goal is to use very low price points to drive traffic & upsell opportunities.

 

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