Papa John’s will close hundreds of underperforming stores, reports The Orange County Register:
Papa John’s International shares slid after sales shrunk more than expected and the pizza chain’s outlook for the year also trailed estimates….
Its North America same-store sales — revenue generated by existing restaurants compared with the prior year — fell 5.4% in the fourth quarter. They were dragged down by both the restaurant chain’s owned and franchised locations….That was more than the 4.3% decline expected by analysts.
Overall revenue also declined to $498 million, about $20 million short of what analysts were anticipating.
“North America results reflected a weak consumer backdrop and elevated promotional environment,” Papa John’s Chief Executive Officer Todd Penegor said….The company cut about 7% of its corporate workforce, and plans to shutter about 300 underperforming stores across North America this and next year. Most of them are franchisee-owned…At the same time, it expects to open 40 to 50 new outlets in the region this year.
“Papa John’s International wants to inject artificial intelligence technology into how its customers order pizza through an expanded partnership with Google Cloud,” Reuters reported.
Fast-food consumption has declined in recent years.
On January 26, FAT Brands Inc., the parent company of restaurant chains including Fatburger, Twin Peaks, Johnny Rockets, and Round Table Pizza, filed for Chapter 11 bankruptcy protection in federal court in Texas, seeking to delay and reduce payment of $1.3 billion in debt obligations. Ironically, the filing came months after FAT Brands announced an expansion deal to add 40 Fatburger locations in Florida over the next decade.
