Papa John’s International, Inc. PZZA announced that Shaquille O’Neal, one of the company’s board of directors, has made an investment in nine of Papa John’s restaurants in Atlanta. These nine restaurants will undergo remodeling and feature O’ Neal’s personalized designs. The design in the front of the building will have the legendary NBA champion and television sports analyst’s signature.
Per a report by Fox Business, O’Neal invested roughly $840,000 in the nine Atlanta-based Papa John’s restaurants and holds 30% ownership of the locations.
Involvement of O’ Neal in business is a significant move on the part of Papa John’s. O’ Neal who is a known restaurateur, owns Krispy Kreme Doughnuts franchise in Atlanta and is also the founder and owner of Big Chicken, a fast-casual fried chicken restaurant in Las Vegas.
The above-mentioned move is evidence of Papa John’s efforts to revive the long-standing declining sales trend and restore the brand image. Unlike other pizza chains, Papa John’s has been under a negative light for quite a long time, owing to the denouncement of its ex-CEO on grounds of racial slur.
A look at the company’s price trend reveals that the stock has had an unimpressive run on the bourses in the past year. Its shares have lost 2.6% against the industry’s rally of 23.7%.
Other Brand Revival Efforts
For quite some time now, Papa John’s have been undertaking measures that would help it restore the brand. The company extended its board to appoint Jeffrey C. Smith, CEO of Starboard, and Anthony M. Sanfilippo, former Chairman and CEO of Pinnacle Entertainment as new directors. Additionally, the company’s president and CEO, Steve Ritchie has been appointed to the board.
The company is also partnering and exploring new avenues to drive investment. Earlier this year, it entered a securities purchase contract with Starboard Value LP and affiliates. Further, the company is said to have sought assistance from Bank of America Corporation BAC on potential buyout interests. Further, rumors had it that Restaurant Brands QSR might team up with the investment capital firm 3G Capital to buy Papa John’s.
We believe that with the above-mentioned moves, this pizza chain stands a chance to revive sales. In 2018, the company’s total revenues declined 11.8% year over year. Further, this recent move will enable Papa John’s to fend off intense competition from the likes of Domino’s DPZ.
Papa John’s currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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