Papa John’s International Inc. signage is displayed on top of a delivery vehicle outside of the company’s restaurant in Nashville, Tennessee.
Luke Sharrett | Bloomberg | Getty Images
With consumers flocking to carryout and delivery during the Covid pandemic, Papa John’s has extended its growth streak into August.
From July 27 through Aug. 23, preliminary estimated North American systemwide same-store sales rose 24.2%, while preliminary estimates show international systemwide comparable sales gained 23.3%, the pizza chain said Tuesday.
Papa John’s previously reported North American systemwide sales growth of 28% in the second quarter, which ended June 28, and 5.3% growth internationally. May was the best month in the company’s history, with same-store sales up 33.5%. Preliminary results showed same-store sales, a key industry metric, rose more than 30.3% in July.
The company had a mixed quarter with revenue coming in slightly below where analysts expected, but overall sales have remained strong even as restaurants have begun to reopen in certain cities and states around the country for on-premise dining.
“I see delivery and take out being a foundational platform for every [quick-service restaurant],” CEO Rob Lynch told CNBC in an interview Tuesday. “I think the companies that have really invested in technology over the last 10 years, and have built that infrastructure, are going to be set up to succeed moving forward … I think we are going to be set up to continue to outperform.”
The company said that nearly all traditional restaurants are open and fully operational in North America. Of some 2,100 international franchised stores, 150 or so are closed in Latin America and Europe in accordance with government policies.
“Our U.K. business is significantly outperforming really every other geography and the outperformance has been driven by the kinds of things we’ve focused on in our turnaround — great innovation across both the products and marketing platforms,” Lynch said. He added that business in South Korea, Latin America and China has also bounced back and there’s pent-up consumer demand within international markets.
Papa John’s is continuing to grow its digital platforms, with 70% of orders coming in digitally and 3 million new customers added in the second quarter.
Lynch has focused on menu innovation during his tenure of one year at the helm of the pizza company, adding new items like Papadias sandwiches, including a newly launched Grilled Buffalo Chicken Papadia, and Shaq-A-Roni pizza, leading to customers ordering more food throughout the day and at dinner time. Customers are responding well to the pizza, which raises funds for Covid-19 relief and racial injustice in partnership with board member and NBA legend Shaquille O’Neill, Lynch said.
“We are trying to create stories around those platforms. We are trying to tap into real-time, relevant consumer insights that are going to drive engagement at a much higher level,” he said. “The Buffalo Chicken Papadia is another wave of innovation on a platform that has been really successful for us, and should drive incremental check growth and bring even more new customers in.”
Like others in fast food, Papa John’s is hiring in big numbers — announcing 30,000 workers would be hired throughout the pandemic to meet demand.
It’s not the only pizza player staffing up — Domino’s last week announced another hiring round of 20,000 workers, bringing its total to 30,000 as well. Chipotle, Dunkin’, McDonald’s and Subway also are hiring tens of thousands of workers to meet changing consumer preferences in this challenging time for the restaurant industry.
Papa John’s stock was up less than 1% in Tuesday’s premarket trading. Shares have gained 57% year to date, the second-best restaurant stock performer, after Wingstop.