Papa Johns generated same-store sales growth for the first time since 2023. | Photo: Shutterstock.
Apparently, when you focus more on your pizza, you sell more of them.
That’s the lesson for Papa Johns, which under CEO Todd Penegor has returned much of its marketing focus on its core pizza product, rather than sides and sandwiches such as Papadias and Papa Bites. The number of pizzas ordered last quarter increased 6%.
The result was 1% same-store sales in the second quarter. While that might not seem like a lot, it was paired with traffic growth and was the first positive result at the Atlanta-based pizza chain in a year and a half.
“Our core pizza business, which was up 6% in the second quarter, continues to grow nicely into the third quarter,” Penegor told analysts this week, according to a transcript on the financial services site AlphaSense. “We’re really feeling good about the core business and we just launched more innovation.”
Papa Johns introduced a new Cheddar Crust in the quarter. That, plus a $6.99 Papa Pairings menu, helped drive sales among higher-spending and value consumers. Customers did buy more medium pizzas, which put some pressure on average check in the period.
The company just launched a Garlic 5-Cheese pizza at $11.99 and has a new “shareable pizza format” with a lineup of dipping sauces it expects to introduce soon. Papa Johns is also testing a larger pizza called The Grand Papa.
The company started selling a Croissant Pizza internationally, though it’s not quite ready for introduction here.
“We’ve got a lot at our disposal to continue to compete really well in the back half of the year,” Penegor said. “You will see sequential improvement in our business throughout the back half.”
Penegor also revealed that the company’s innovation efforts were lacking when he arrived. “On the innovation pipeline, it was relatively bare, to be honest, when I got here,” he said.
Papa Johns has undergone some major changes over the past year and a half as sales slumped and the chain’s marketing efforts last year failed to resonate with consumers. The company also shifted away from local marketing in a belief that national marketing was more efficient.
Penegor took over as CEO last year and wants to shift more marketing back to local. The company is investing in local marketing efforts at company locations and wants operators to do the same. “Pizza is a game played nationally, but won locally,” Penegor said.
The company’s efforts on pizza also include quality improvements. The company is calibrating ovens to ensure more consistent performance and enable more innovation. “Our ovens are the single most important piece of equipment in our restaurants, and by regulating bake time and temperatures, we’re able to improve our ability to deliver a consistent pizza with each and every order,” Penegor said.
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