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Papa John's will look to celebrities, YouTube influencers to ignite a turnaround

Brian Sozzi
Editor-at-Large

Papa John’s will soon replace founder John Schnatter with sports stars and YouTube influencers in its promotions and ad campaigns.

“Whether it’s the folks on Instagram or YouTube that have a broad following that meet out consumer targets — they may not be celebrities but have broad followings — that reach the demo we want to be speaking to... looking at,” Papa John’s CEO Steve Ritchie told Yahoo Finance. Ritchie said Papa John’s is also looking at athletes to help get the word out on the chain’s quality ingredients, its various new pizzas and revised rewards programs.

Recall that NFL great Peyton Manning — and one-time Papa John’s franchisee — was pitching the brand on TV with Schnatter for a long time. Papa John’s is the former exclusive pizza partner of the NFL. It parted ways with the NFL last year amid alleged racist comments by Schnatter. Yum! Brands’ Pizza Hut swooped in quickly to ink an exclusive deal with the NFL until 2021.

No final decisions on spokespeople have been decided, according to Ritchie.

“The opportunity for us to be able to do this is based upon sentiment improvement of the brand — you are not going to get big-name influencers that want to be associated with a brand that has challenges in terms of sentiment.”

Repairing the pizza chain’s image

The faster Papa John’s could repair its brand’s image and sign a few key spokespeople the better.

Although Papa John’s guided to a challenging fourth quarter several weeks ago, it didn’t make the results any easier to digest. Papa John’s said Tuesday after the close of trading that North America and international same-store sales fell 8.1% and 2.6%, respectively, in the fourth quarter. Earnings of 15 cents a share missed Wall Street analyst estimates for 18 cents a share.

Papa John’s sees 2019 earnings in a range of $1 to $1.20 a share. Analysts were looking for $1.20 a share. Shares rose 3.9% on Wednesday.

Ritchie told Yahoo Finance that sales trends in February have improved noticeably relative to the end of the fourth quarter. He stopped short of saying same-store sales are growing again.

"We intend to get back to positive same-store sales growth at some point in 2019,” Ritchie said.

Papa John’s will unveil six new specialty pizzas in March in a bid to bring back customers. It’s also exploring more $6 pizzas, a price level that Ritchie said has brought success to Papa John’s in the past.

Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi

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