Papa John's Faces Challenges Amid Industry Giants

Background:

* Papa John's, with over 40 years of experience, has recently encountered growth stagnation.
* During the COVID-19 surge in pizza demand, its shares reached a record high of $138.53 in late 2021.
* However, subsequent management missteps have led to a 75% decline in share value.

Key Challenges:

* Misaligned value proposition with higher price points than competitors.
* Declining same-store sales in North America: -4% in Q4 and -4% for the full fiscal year.
* Weak foot traffic and ticket size.

New CEO's Strategy:

* Todd Penegor, appointed CEO in August 2022, acknowledges the need for a shift in value messaging.
* Focus on promoting value offerings like Papa pairings to drive awareness and attract customers.
* Improvement of the Papa John's app for a seamless customer experience.
* Kevin Vasconi, a former Wendy's executive, to head digital and technology.

International Performance:

* International same-store sales growth remained strong, providing an encouraging outlook for 2025.

Competitive Landscape:

* Competitor Domino's (DPZ) maintains its leadership position with only a 1% gain over the past year.
* Analysts predict Domino's continued success due to its focus on value for customers.

Rebalancing Strategy:

* Papa John's will adjust its marketing strategy by balancing contributions to a national marketing fund and local advertising.
* This change aims to increase customer acquisition and profitability for both the company and franchisees.