Former Wendy’s CEO Takes Papa Johns Helm Amidst Slumping Q2 Sales

Papa Johns has a new CEO, and he’s the man who previously turned Wendy’s proverbial sinking ship around. This is a bit of welcome news amidst reports of the company’s slumping Q2 sales.

As was previously reported by RetailWire at the beginning of the month, Todd Penegor was appointed as the company’s new president and CEO. Penegor brings nearly two decades of experience in the food and consumer goods businesses, having served as CEO of Wendy’s from May 2016 to February 2024.

“Todd has an outstanding record of leading winning teams and scaling franchised operations globally through trusted partnerships, product innovation and digital transformation. He has also demonstrated his ability to effectively allocate capital, drive value and enhance profitability,” said Christopher Coleman, chair of the Papa Johns Board of Directors, in a statement. “We are excited to welcome Todd to Papa Johns and look forward to his contributions as we work to create significant, sustainable value for our shareholders and franchisees.”

In an interview with Nation’s Restaurant News, Penegor explained that he was excited to return to the corporate world. “I love the restaurant business. I’m hardwired for it,” he said. “I started to think about what I missed in the space, the communities we’re in, supporting a franchisee community, opportunities for our employee base. I missed it.”

Papa Johns’ Rocky Road

Penegor, however, knows that he’s walking into a minefield when it comes to Papa Johns. John Schnatter, the man who founded the company in 1984, vacated the position of CEO amidst a swarm of controversy.

He sparked a public outcry in 2012 by criticizing the Affordable Care Act and asserting that it would have a detrimental effect on customers and franchisees. Papa Johns’ stock price dropped significantly as a result of his remarks, according to the International Business Times UK.

Schnatter publicly criticized the NFL’s treatment of national anthem protests in November 2017, drawing a connection between the protests and dwindling NFL viewership as well as Papa Johns’ sales. Sales crashed as a result of the remarks, and rivals profited from the bad press that caused a PR storm. The next month, Schnatter stepped down as CEO but kept his position as board chairman.

Past controversy of former CEOs aside, Penegor is also now contending with the company’s slumping sales, after a recent report revealed that the Q2 earnings fell short of projections and expectations.

According to Yahoo! Finance, Papa Johns’ Q2 CY2024 revenue of $507.9 million, down 1.3% year over year, fell short of analysts’ estimates. It improved from its $0.59-per-share profit in the same period the previous year, reaching a non-GAAP profit of $0.61 per share this quarter.

Due to its size and the advantages of economies of scale, Papa Johns has an advantage over its smaller rivals in the restaurant industry. The company developed more restaurants and increased its reach, which helped it make up for its poor 6% annualized sales growth rate over the previous five years.

Wall Street anticipates that sales will increase by 1.4% in the upcoming 12 months, which is an acceleration from the current quarter.

Same-store sales have also slumped. Over the past eight quarters, Papa Johns’ demand has decreased, and its same-store sales have decreased by 1% annually on average.