Latest news with #ToddPenegor
Yahoo
14 hours ago
- Business
- Yahoo
Jim Cramer Notes 'It's a Wait-and-See Situation With Penegor at Papa John's'
Papa John's International, Inc. (NASDAQ:PZZA) is one of the 18 stocks Jim Cramer recently shared insights on. A caller asked about the company during the lightning round, and Cramer replied: 'You know, Papa John's, only six ingredients in a Papa John's pizza. I find that quite incredible. Todd Penegor runs it now. You know, the previous CEO went on to Shake Shack. He's crushing [it] at Shake Shack. I think it's a wait-and-see situation with Penegor at Papa John's, so I'm not going there yet. I'm not saying yes.' A family gathering around a delivery pizza box in the comfort of their own home. Papa John's (NASDAQ:PZZA) operates and franchises pizza restaurants offering delivery, carryout, and dine-in services. The company also supplies ingredients, packaging, and equipment to its locations. River Road Asset Management stated the following regarding Papa John's International, Inc. (NASDAQ:PZZA) in its Q4 2024 investor letter: 'The holding with the lowest contribution to active return in the portfolio during Q4 was Papa John's International, Inc. (NASDAQ:PZZA), the third-largest pizza delivery company in the world. Early in the quarter, the stock rallied on speculation it was going to be acquired by Restaurant Brands International (QSR), owner of Tim Hortons®, Burger King®, and Popeyes®. However, when a deal did not materialize the stock sold off into year-end. During the quarter, PZZA held an Investor Day where management highlighted recent progress on operational improvements, new unit growth, and franchisee profitability. New store build costs are down -20% to $500k and the average franchisee generates $150k in annual earnings before interest, taxes, depreciation, and amortization (EBITDA), indicating payback periods of less than four years and an attractive unlevered cash-on-cash return for franchisees, which should bode well for unit growth. Additionally, of the top 20 largest franchisees in the system, 80% have new store development agreements in place. The commissary business should continue to increase margins at 100 bps annually to 8%, bringing it in-line with competitor Domino's®. This should incentivize franchisees to drive transaction growth as they will receive volume rebates. Overall, we are encouraged by these developments and believe the company is still significantly undervalued relative to its closest public peers. If management successfully executes these initiatives, we anticipate the valuation gap will close. We trimmed the position during the quarter.' While we acknowledge the potential of PZZA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Apollo, Irth Capital look to take Papa Johns private
Apollo and a Qatari investment fund have made a bid for Papa John's that would value the pizza chain at around $2 billion, according to people familiar with the matter. It's an unlikely pairing: Apollo, one of Wall Street's deepest pockets; and Irth Capital, which is backed by Sheikh Mohamed al Thani, a member of the Qatari royal family, and managed just $190 million as of Dec. 31, regulatory filings show. With Papa John's stock now trading around $48 a share, the consortium made a bid in the low $60s, people familiar with the matter said. Irth brings a 5% stake in Papa John's and some expertise in buying consumer brands in need of a turnaround. One of its cofounders bought mattress maker Casper in 2021 and Bojangles, the fried-chicken house, in 2017. But the smaller fund still needs to sort out its financing, and it's possible that Apollo could go at it alone, according to people familiar with the matter. The pizzeria's shares have outperformed competitors under CEO Todd Penegor, and while the stock still trades at a slight discount to Yum! and Domino's, management has publicly said it is making progress changing that. 'We know we can deliver good value for the money and keep building on the trends that we're seeing,' Penegor said at an investor conference Tuesday. Apollo and Papa John's declined to comment. Irth did not return requests for began exploring a takeover of the American icon earlier this year, Semafor first reported in February. Apollo has made forays into fast food before. It acquired Wagamama's parent, Restaurant Group, in a $620 million deal in 2023, and until 2022 owned Mexican fast-casual chain Qdoba. But private equity represents a smaller and smaller part of its business these days — more than 80% of its $785 billion under management is made up of loans. Any formal sales process would bring other bidders eager for a shot at a leveraged buyout in a quiet market. Inspire Brands, the owner of Arby's and Buffalo Wild Wings, has historically been a voracious buyer and hasn't done a big deal since 2020, when it bought Dunkin' Donuts. Roark Capital, which owns Subway, is likely still digesting a $1 billion deal for Dave's Hot Chicken announced last week, though Papa John's franchise model — in which the company licenses out menus, logos, and ingredients to independent owners — aligns with their investment strategy.
Miami Herald
07-06-2025
- Business
- Miami Herald
Papa Johns makes major menu change to win back customers
Over the past few months, consumers across the country have scaled back their spending on fast food, which has significantly impacted Papa Johns' sales. In Papa Johns' (PZZA) first-quarter earnings report for 2025, it revealed that its U.S. comparable sales declined by 3% year-over-year. Don't miss the move: Subscribe to TheStreet's free daily newsletter During an earnings call on May 8, Papa Johns CEO Todd Penegor said that the wallet of the consumer remains "challenged" and highlighted that increased competition is also impacting sales. Related: Papa Johns struggles to recover from concerning customer behavior "As we look at consumer confidence, it does remain challenged amid the economic and market volatility," said Penegor. "We're all talking about it. We all see it. We've seen intensification on competitive pressures in the promotional cycles. We've also seen some challenges on the lower-income cohorts." Consumers are specifically pulling away from having their food delivered and are instead opting to pick up their orders in stores to save money. In response to this trend, Papa Johns partnered with Google Cloud in April to "enhance" the ordering and delivery experience for its customers. "We know we can do delivery better," said Penegor. "And leveraging our new partnership with Google, we will improve driver dispatch and routing, increase the accuracy of our delivery time estimates, and provide better driver tracking." Image source: Bloomberg/Getty Images As Papa Johns fights to reverse alarming customer behavior, it has decided to shake up its menu in order to win back customers. The pizza chain decided that Shaq-a-Roni pizza, launched in 2020 for a limited time, will now become a permanent menu item, selling for $15.99 nationwide. The pizza is inspired by basketball player Shaquille O'Neal and became a fan-favorite five years ago due to its extra-large size. "At Papa Johns, we're elevating the classics that have set us apart to deliver even more value to our customers," said Chief Marketing Officer Jenna Bromberg in a press release. Related: Pizza Hut struggles to reverse troubling consumer trend In addition to making Shaq-a-Roni pizza a permanent menu item, Papa Johns recently introduced Cheddar Crust pizza to its menu, which starts at $11.99 and contains a baked blend of cheddar cheese and garlic seasoning on its crust. To pair with the pizza, the company also launched Cheddar Cheesticks, made from dough that is covered in garlic sauce and topped with seasoned cheddar cheese. They sell for $10.50 and are served with Papa Johns' original pizza dipping sauce. Both new menu items are available for a limited time. The menu changes from Papa Johns come after its competitors have also added new menu items to boost low sales. In March, Domino's Pizza added a Parmesan Stuffed Crust pizza to its menu after it reported weak sales during the fourth quarter of 2024. More Food + Dining: Domino's Pizza unveils generous deal amid alarming consumer trendSteak 'n Shake's beef tallow fries aren't as healthy as they appearThe Cheesecake Factory makes bittersweet changes to its menu In April, Pizza Hut also brought back Cheesy Bites Pizza, a fan-favorite menu item, for a limited time and introduced three new exclusive dipping sauces: Chipotle Ranch, Ultimate Ranch, and Pepperoni Ranch. The menu change occurred during a period when Pizza Hut's system sales in the U.S. decreased by 7% year-over-year. Many consumers have recently been avoiding fast-food restaurants due to their inflated prices, which have spiked by roughly 47% over the past decade. Data from Ipsos Consumer Tracker last year revealed that 34% of U.S. consumers have cut back on having dinner at fast-food restaurants. A total of 30% also said they have been avoiding getting dinner from takeout or delivery, while 45% said they are cooking dinner at home more. Related: Domino's Pizza suffers a startling loss as customers switch gears The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Forbes
23-05-2025
- Business
- Forbes
Papa John's: How Technology, Quality, and Franchise Growth Keep It Thriving"
The QSR pizza segment is fiercer than ever, yet few brands like Papa John's have weathered the decades. Founded on a promise of quality and propelled by an early leap into digital ordering, the company now boasts more than 6,000 restaurants worldwide. To understand how the brand continues to evolve, I questioned CEO Todd Penegor and Chief Development Officer Joe Sieve for an unfiltered discussion about technology, franchise growth, and staying true to a 40‑year‑old slogan in a world that moves at app speed. Our unaltered and complete conversation is framed by the insights that emerged between the lines. Gary Occhiogrosso: Papa John's is one of the most recognizable pizza brands in the world. Which key moments or milestones helped solidify the company's place as a household name? Todd Penegor: Our intentional focus on quality and craftsmanship has drawn people to Papa John's. Over the years, Papa John's worked to make that premium pizza experience accessible and convenient in ways that had not been done before in our industry. We were the first national pizza company to offer online ordering at all of its U.S. delivery restaurants in 2001, the first to process online payments using a credit/debit card in 2005, and the first to launch a nationwide digital rewards program in 2010. Occhiogrosso: What role did the company's early focus on "Better Ingredients. Better Pizza." play in establishing brand identity, and how are you refreshing that messaging to resonate with new and loyal customers? Penegor: "Better Ingredients. Better Pizza." has always been more than a slogan; it's the foundation of our brand, and it communicates a core promise that's built trust and loyalty among millions of customers worldwide. That promise will continue to guide everything we do to enhance the customer experience, from menu innovation to loyalty programming. By infusing that promise across all customer touchpoints and strengthening our commitment to quality, we can create new fans of Papa John's and deepen our relationships with our most loyal customers. Papa Johns was one of the first QSR brands to build an online presence and provide new channels for customers to use when ordering pizza. Every brand has an app, and the digital experience is often the primary customer experience. Occhiogrosso: What is Papa John's vision for a differentiated digital experience, and what improvements do you think need to be made to make that experience a reality? Penegor: We've got to make our customers' digital experience seamless and convenient from the moment they first turn to Papa John's to browse our menu to post‑delivery. To do that, we're working to improve our app and website and evolve our Papa Rewards program. We launched our first loyalty enhancement in mid‑November 2024, allowing customers to unlock Papa Dough faster. This drove lapsed consumers back to the brand and showed consumers a distinctive value proposition we could offer. Now that we have made Papa Rewards more valuable, we're working to make the loyalty program more engaging and seamless, adding gamification. All along the way, we will be testing how we can continue to improve upon each touchpoint. Occhiogrosso: What new operational technologies or service models are you exploring to improve ordering, delivery speed, and overall customer experience? Joe Sieve: We're making strategic moves to streamline operations and drive us toward two goals: efficiency and consistency. We must ensure that the tools and processes we know improve customer satisfaction (e.g., driver tracking technology, operations simplification, coaching, feedback) and are implemented across the entire system. One key example is oven calibration. We've determined some differences among restaurants in oven temperature and bake time. Even small differences can have a big impact on the pizza that is ultimately delivered, factors like the initial presentation when a customer opens the box, the texture of the "cheese‑pull," and the overall taste. So, we will be more rigorous in ensuring standards for these key settings that make a difference in the customer experience. Occhiogrosso: With third‑party delivery services growing in popularity for the pizza category, how does Papa John's prioritize partnerships with these platforms alongside in‑house delivery? Penegor: We were one of the first national pizza brands to embrace third‑party delivery in 2019, and we've continued to strengthen those partnerships to enhance both operational efficiency and the customer experience. Pizza has always been at the forefront of food delivery, and we've worked to reach customers wherever they may be looking for pizza across the various channels of choice among our customers, including third-party aggregators. At the same time, we want to make ordering directly from Papa John's the preferred channel for customers. When customers think of ordering pizza, we want them to choose our channels first. To do that, we have to provide them with a best‑in‑class experience that matches the premium nature of our products. Occhiogrosso: As you continue to expand globally, how are you working with franchisees to ensure alignment with growth initiatives while maintaining strong profitability, and what kind of incentives or support systems are being introduced to attract new franchisees? Sieve: At the end of last year, we celebrated the opening of the 6,000th Papa John's restaurant, a milestone few brands achieve. As we expand globally, we're working closely with franchisees to ensure alignment with our growth strategy by keeping their profitability front and center. That means ongoing investment in the restaurant economic model, streamlined decision‑making, and deeper collaboration with our restaurant support centers to foster open dialogue and feedback. We're also focused on attracting new franchisees who share our growth mindset. We are offering stronger support systems, operational testing for new initiatives before rollout, and a commitment to building a sustainable, scalable business model that works for both new and existing partners. We plan to roll out some new development initiatives closely tailored to our growth goals, whether shoring up existing markets or entering new ones. Occhiogrosso: What key factors do you consider when selecting new growth markets, and how do you tailor your approach in different regions? Sieve: It's not just about where we grow but also how we grow. Every region has its own dynamics, so we adjust our strategy based on local consumer preferences, operational considerations, and supply chain readiness. Our commitment to profitable, sustainable growth is consistent across the board. We're working closely with our franchisee partners to ensure we're entering markets where we can deliver on our brand promise while giving customers a great experience. For example, in some markets in North America, our restaurants are generating very high volumes of orders, which can affect factors such as delivery time. So, in places like that, we have an opportunity to maintain our standards of service, perhaps by opening more restaurants in the area to create optimized delivery areas. Occhiogrosso: What are your franchisees' pain points, and how are you working to address those? Sieve: We know franchisee success is foundational to the strength of our brand, and our franchisee partners are clear about what they need to succeed. Some pain points we've heard are consistent with what we're seeing across the industry: margin pressure, labor challenges, and sales declines, and that's why we're focused on enhancing value perception and upgrading our technology infrastructure to improve profitability and operational efficiency. We've recently rolled out a suite of new tools to empower our franchisees to drill down into the economics of each one of their restaurants, to show them the various factors driving the success of that restaurant versus other "like" restaurants, so we can help them identify opportunities for growing profitability. Another key effort we have focused on is lowering the cost of building new restaurants. In the second half of 2024, among our corporate-owned restaurants, we achieved an average build cost of $515,000 per restaurant, about a 25% reduction from the year prior. We have been sharing what we learned from those efforts with our franchisees and are continuing to find new ways to lower build costs for them. Occhiogrosso: In the very crowded pizza space, what unique points of differentiation might be compelling to a potential franchisee? Sieve: We've built a brand based on a level of quality that our customers trust, and that translates into long-term loyalty and sustainable business for our franchisees. What is also compelling to franchisee partners is that we're not chasing growth for growth's sake. Rather, we're building a system where every restaurant has the tools, support, and infrastructure to succeed. When a franchisee is ready to grow, we work alongside them to plan the right volume and speed of growth for the markets they serve. And, unlike others in the pizza industry, our franchisees have many opportunities to explore – whether infill in an existing market or lead the charge into an area not yet served by Papa John's. Occhiogrosso: Franchisee relations are critical to any brand's success. Can you share how Papa John's ensures franchisees remain profitable amid rising labor and supply chain costs and what actions you are taking to prevent franchisee turnover? Sieve: The average tenure of a Papa John's franchisee is about 15 years, and many of our partners operate multiple restaurants with plans to grow even further. While the industry continues to navigate material costs, we are in the process of kicking off a multi-year initiative to reduce costs across our supply chain. Our vertically integrated supply chain and regional quality control center network enable us to maintain quality, manage costs, and identify efficiencies. When a particular restaurant or group of restaurants is underperforming, we work with franchisees to identify potential solutions to improve operations and continue serving the customers in that area who have come to rely on Papa John's. In several cases, restaurant transfers from one franchisee to another have driven dramatic turnarounds in the sales performance of those restaurants, as the incoming franchisee improved service levels, found new ways to deliver value to customers, and boosted morale among team members. One key effort we have been focused on is lowering the cost of building new restaurants. In the second half of 2024, among our corporate-owned restaurants, we achieved an average build cost of $515,000 per restaurant, about a 25% reduction from the year prior. We have been sharing what we learned from those efforts with our franchisees and are continuing to find new ways to lower build costs for them. Occhiogrosso: Sustainability and social responsibility are becoming key factors in consumer decision-making. How is Papa John's incorporating sustainability into its operations, and what concrete steps are being taken to reduce the environmental footprint of both the corporate and franchise operations? Penegor: Sustainability is an ongoing priority for our customers, franchisees, and businesses. At Papa John's, we're focused on reducing our environmental footprint through energy efficiency and food waste reduction efforts. First, regarding energy efficiency, we're looking to reduce energy consumption across our operations, including our corporate-owned restaurants, quality control centers, and transportation fleet. In corporate-owned restaurants, in 2024, our repairs and maintenance program included the installation of tankless water heaters and new refrigeration systems that produce fewer emissions. Our Energy Management System (EMS) enables us to monitor, control, and optimize electricity generation and transmission across our restaurants. We also continue to test Powerhouse Dynamics EMS technology, which allows us to monitor energy use in certain restaurants and gather critical data to understand the most significant users of energy. We also conducted tests to assess how adjustments in restaurant operating hours could potentially drive energy savings. This data will help identify opportunities to conserve power and inform decisions on prioritizing equipment upgrades to improve the energy efficiency of our restaurants. We also aim to optimize our quality control centers, transportation, and logistics operations, which improves energy efficiency and reduces fuel consumption and associated emissions, including: Using routing technology to ensure the most efficient delivery routes to our restaurants and reduce driving time on the road. In 2024, route optimization projects helped avoid more than 164,000 travel miles. Expanding training within our Shore Power program provides an approximate 25% reduction in diesel fuel consumption each year by using electric power to refrigerate delivery trucks during loading, which can take up to five hours. As of 2024, all 12 of our QCCs are equipped with this technology. Improving idling times across the fleet during loading and unloading through technological advancements and educational efforts among our drivers. Secondly, to prevent food waste, we use forecasting tools and an inventory management system to source ingredients accurately and have a donation program for when orders are incorrect or go uncollected. Through our Harvest Program in the U.S., in partnership with Food Donation Connection, surplus meals are donated to over 280 community organizations. In 2024, through nearly full participation across our corporate restaurants and the Test Kitchen in our Atlanta Restaurant Support Center (RSC), we donated nearly 360,245 meals. Since 2010, the program has diverted more than 1.7 million pounds of food that would have otherwise gone to landfills to help feed those experiencing food insecurity. Penegor and Sieve paint a picture of a brand that refuses to coast on name recognition. Papa Johns is banking on operational rigor and data‑driven experimentation to keep the "Better Ingredients" promise fresh for a new generation of pizza lovers and franchisees- from recalibrating ovens to rewriting the rules of loyalty programs. Papa John's is betting that relentless consistency, smarter tech, and franchisee‑centric economics will keep the brand's slice of the pie hot and growing for years in a market crowded with pizza choices.
Yahoo
09-05-2025
- Business
- Yahoo
Papa Johns' Q1 2025 net income drops despite rise in revenue
Papa Johns has reported a 0.9% increase in total revenues for the first quarter of 2025, reaching $518.3m, compared to $513.9m for the same period in 2024. The uptick was primarily due to an $11.4m surge in commissary revenues, reflecting higher commodity prices, and a $6.6m boost in advertising funds revenue, following an increase in the National Marketing Fund contribution rate initiated in Q2 2024. The company's net income for the quarter stood at $9.3m, which was a significant $5.6m drop from the $14.9m reported in the Q1 of the prior year. Global system-wide restaurant sales reached $1.22bn, marking a 1% growth excluding foreign currency impacts. This was attributed to stronger International comparable sales and a 2% global net restaurant growth over the past 12 months. However, these gains were partly negated by a dip in North America comparable sales. Adjusted EBITDA also saw a decrease, falling by $10.9m from the previous year Q1. Earnings per share (EPS) were impacted as well, with diluted EPS down to $0.27 from $0.44 and adjusted diluted EPS decreasing to $0.36 from $0.67 when compared year-over-year. As of 30 March 2025, Papa Johns operated 6,019 restaurants across 50 countries. Despite the mixed financial performance, Papa Johns remains consistent with its 2025 annual guidance. The company forecasts system-wide sales to increase by 2% to 5%, with North America and International comparable sales ranging from flat to 2% rise. The guidance also outlines restaurant development plans, with 85 to 115 new openings in North America and 180 to 200 internationally, alongside capital expenditures projected between $75m and $85m. Papa Johns president and CEO Todd Penegor said: 'We are pleased with our continued progress in the first quarter to advance our transformation as we execute against our five key priorities. Our strategic investments in marketing and technology are driving early momentum in the business, and customers are responding positively to our strengthened value proposition and enhanced digital and loyalty experiences, as evidenced by sequential improvement in comparable sales and transactions.' In April 2024, Papa John's International unveiled plans to open 50 more US restaurants by 2028 through a new agreement with franchisee Nadeem Bajwa and his company, the Bajco Group. "Papa Johns' Q1 2025 net income drops despite rise in revenue" was originally created and published by Verdict Food Service, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
