Papa John’s International Inc (NASDAQ:PZZA) saw its shares retreat in pre-market trading following disappointing fourth-quarter earnings released after-hours and with news it is no longer the official pizza of the National Football League (NFL).
After reporting a quarterly earnings miss, Papa John’s chief executive, Steve Ritchie told investors that the pizza chain will be switching to a more focused marketing strategy after determining that there “are better ways to reach and activate this audience.”
In a joint statement, Papa John’s – which has been an official NFL sponsor since 2010 - and the NFL said the decision was mutual.
In a separate announcement on Wednesday, Yum Brands Inc. (NASDAQ:YUM) said its Pizza Hut chain is the new official sponsor of the NFL.
Pizza Hut said it has 7,500 restaurants, while Papa John’s had 3,441 restaurants in North America as of December 31 2017.
Papa John’s founder and then-CEO John Schnatter lashed out at the NFL after the firm’s third-quarter earnings announcement in November 2017, blaming player protests for the company’s poor sales.
Schnatter later apologised for his comments and resigned as Papa John’s CEO, although he remains chairman of the company.
After-hours on Tuesday, Papa John's reported fourth-quarter earnings of US$28.5mln, or 81 US cents a share, on sales of US$467mln, up from US$439.6mln a year earlier and just above forecasts for US$464mln.
After adjusting for effects of the US tax changes, the company reported earnings of 65 US cents a share, down from 69 cents a share a year earlier and below forecasts for an increase to 70 US cents a share.
In pre-market trading, Papa John’s shares were down 5.4% at US$53.30.