In 4Q17, Papa John’s (PZZA) posted SSSG (same-store sales growth) of 2.6% in the international market, while in North America, its SSSG fell 3.9%. In North America, the company-owned restaurants posted an SSSG decline of 4.7%, while franchised restaurants posted a decline of 3.5%.
Papa John’s SSSG in North America was negatively impacted by the underperformance of promotional offers. Also, the company’s investments in advertising failed to drive customer traffic at its restaurants. In international markets, Europe, Latin America, China, and the Middle East posted a strong performance with growth in customer traffic primarily driving the segment’s SSSG.
For 2018, Papa John’s management is expecting its SSSG in North America to be in the range of -3.0% to 0%, while the SSSG in international markets is expected to be in the range of 3.0% to 5.0%. To slow down the decline in its SSSG, Papa John’s has hired new advertising and PR firms to improve its communication surrounding its use of higher quality ingredients. Also, the company has been focusing on its value proposition, the implementation of technological advancements, and the improvement of restaurant efficiencies to drive its SSSG.
Next, we’ll look at Papa John’s 4Q17 unit growth.