Yahoo Finance Papa John's new CEO: 'We have the most loved pizza brand in the world'
It’s a big day for Papa John’s (PZZA) and one student of the fast-food industry.
Papa John’s announced Tuesday it has appointed Arby’s President Rob Lynch as its new CEO. Lynch will replace Papa John’s leader and former store employee, Steve Ritchie, who has worked this past year to stabilize the brand’s sales and relationships with struggling franchisees following reportedly racist comments from founder John Schnatter.
Lynch — following marketing stints at Procter & Gamble (PG) and Taco Bell — joined Arby’s as chief marketing officer in 2013. He was appointed president in 2017, overseeing 3,400-plus restaurants. Lynch is credited with creating the “We Have the Meats” marketing campaign that has helped power a long stretch of sales growth for Inspire Brands-owned Arby’s.
“It feels amazing,” Lynch told Yahoo Finance when asked about his appointment. “I have been working my whole life to get here.”
Starboard Value CEO Jeff Smith told Yahoo Finance he helped recruit Lynch and appreciated Ritchie’s efforts to right the ship.
Activist investor Smith’s Starboard Value disclosed a $200 million investment in Papa John’s in February. It recently exercised an option to buy $50 million more in Papa John’s stock. Smith is now chairman of Papa John’s board, which touts NBA star Shaquille O’Neal, who recently announced a new tie-up with the pizza chain.
Smith told Yahoo Finance that besides helping to recruit Lynch, he is focused on talent development and coaching at Papa John’s. To be sure, Lynch and his fellow board member Shaq have some work to do to get Papa John’s firing on all cylinders again.
Papa John’s North America same-store sales fell 5.7% in the second quarter. The North America sales decline marked an improvement from an 8.1% drop in the fourth quarter (the low point in the business) as Papa John’s offered more pizza deals and rolled out several new flavors.
Second-quarter international same-store sales rose 0.3%.
Papa John’s reiterated its 2019 earnings guidance in a range of $1 to $1.20 a share at the time. The company reaffirmed its outlook Tuesday.
Lynch said he plans to do a lot of listening in his first 90 days as he works to form a turnaround plan.
“We have the most loved pizza brand in the world — I am very excited about our future,” Lynch said.
Bye-bye sandwiches, hello pizza dough.
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