What is in this article?:
- Papa John's: Digital ordering growth helps lift 1Q sales
- International progress
Founder and CEO John Schnatter said that successful ads and international growth also contributed to positive results for the quarter.
Saying pizza is a good business to be in right now, executives at Papa John’s International Inc. said Wednesday that the company plans to build on the strength and momentum of sales both domestically and around the world.
The Louisville, Ky.-based pizza chain reported a 13.7-percent increase in first-quarter profit. Same-store sales rose 1.6 percent among units in North America, despite higher food costs — primarily cheese.
John Schnatter, Papa John’s founder and chief executive, partially credited the results to the chain’s Super Bowl promotions featuring celebrity athlete Peyton Manning, who is also a Papa John’s franchisee in Denver. He also said the pizza chain’s product quality and customers service scores were at “an all-time high.”
Growth in digital and mobile ordering also contributed to the quarter’s positive results, he said, noting that it accounted for about 40 percent of all sales, with some markets topping 50 percent.
Such advances increasingly give larger chains an advantage over smaller regional chains and independents, said Tony Thompson, executive vice president, chief operating officer, and president of PJ Food Service. “Value and choice remain paramount,” said Thompson. “But the pizza category is a great value in the economy we’re in.”
Schnatter, said the economic environment “remains challenging,” and the three big pizza brands in the U.S. have all been competing on price offering pizzas around $8 — though Papa John’s is able to charge a little bit more for more-premium products. Still, he said, “We don’t operate in a vacuum. If we’re feeling pressured and take price, so do they.”
At company-operated units in North America, same-store sales rose 3.9 percent, compared with a 0.8-percent increase for franchisees, and Schnatter said the chain’s corporate locations continue to exceed those of franchisees on almost all matrices. “We’re about the only franchisor that outperforms its franchisee base,” he said, noting that the company is putting together a program to help share best practices.
The company expects to reach 1,000 international units by this summer, but Thompson said the company is just getting started with growth outside North America. “The runway is long and wide,” he said.