Papa John’s International Inc on Tuesday reported a smaller-than-expected decline in quarterly comparable sales in North America, helped by new advertising and rebranding as it tries to recover from bad publicity stemming from an acrimonious split with its founder.
The Louisville, Kentucky-based company said it now expects full-year North America comparable sales to decline in the range of 6.5 percent to 8.5 percent, compared to a prior outlook for a 7 percent to 10 percent decline.
The news sent the company’s shares up about 4 percent.
Papa John’s has been trying to rebound after battling with its founder John Schnatter over control of the company. Schnatter was booted as chairman following his usage of a racial slur during a conference call in July.
To counter the bad publicity, the company revamped its advertising, removed Schnatter as the brand’s spokesperson, as well as his images from promotional materials, and launched a third-party audit into the brand’s culture.
Papa John’s said its newly-launched campaign “Voices of Papa John’s” featuring employees and the chain’s franchisees owners helped improve traffic in September.
“We are seeing improved consumer sentiment. Our attention now is on activating that sentiment to drive increased sales,” Chief Executive Officer Steve Ritchie said on a post-earnings call with analysts.
The company reported a 9.8 percent sales decline in North America in the third quarter ended Sept. 30. Analysts on average had expected a 10.9 percent drop, according to IBES data by Refinitiv.