A decision by Papa John’s to airbrush its founder from all marketing and branding has paid off after the restaurant chain exceeded expectations by posting a smaller than expected fall in quarterly sales across North America.
The pizza purveyor has been under fire following a series of controversies involving its founder John Schnatter. But a decisive split from his legacy appears to have taken the sting out of these incidents, with third quarter sales across the continent falling by 9.8% – versus prior expectations of a more precipitous dip of as much as 10.9%.
Schnatter was forced out as chairman over the summer after he was shown to have used the n-word during a conference call, prompting the radical action of removing Schnatter’s image from all Papa John’s marketing materials in a bid to minimise the damage.
Instead the chain is now putting its employees front and centre of a new ‘Voices of Papa John’s’ campaign.
Updating analysts on the brightening outlook, chief executive officer Steve Ritchie said: “We are seeing improved consumer sentiment. Our attention now is on activating that sentiment to drive increased sales.”
Full-year sales are now expected to come in some 6.5 to 8.5% lower, somewhat better than earlier expectations of a dip of as much as 10%. These falls are set against higher than expected rebranding and support costs of between $50m and $60m, much more than the $30m to $50m first thought.