On March 13, Papa John’s (PZZA) announced it had formed a national partnership with DoorDash for delivery service at more than 1,400 of its restaurants. To celebrate the partnership, DoorDash customers will get free delivery for over $10 between March 15 and March 17 at participating restaurants.
The partnership is expected to aid Papa John’s in reaching new customer segments, and also to expand its off-premise offerings. In a statement, senior vice president of customer experience at Papa John’s, Anne Fischer, stated, “This partnership extends our continued commitment to meet customers wherever they are and provide simple, easy ordering for guests in addition to our own world-class Papa John’s mobile app. More than 60 percent of Papa John’s transactions occur online. With this in mind, we are dedicated to exceeding our customers’ expectations when it comes to ordering and delivery convenience.”
The announcement of the delivery partnership and the strengthening of the broader equity market appear to have led to a rise in Papa John’s stock price. By the end of March 13, the company was trading at $46.37, which represents a rise of 2.1% from its previous day’s closing price. On the same day, the S&P 500 Index rose by 0.7%.
After losing 30.1% of its stock value in 2018, Papa John’s has started 2019 on a stronger note with its stock price rising by 16.5% YTD as of March 13. The company’s stock price was driven by the management’s optimistic outlook and John Schnatter’s announcement earlier this month that he had reached an agreement with the company to resolve his lawsuits.
In comparison, Domino’s Pizza (DPZ) and Yum! Brands (YUM) have returned -1.1% and 7.3%, YTD, respectively. The Consumer Discretionary Select Sector SPDR ETF (XLY), which invests 8.3% of its holdings in restaurants, has returned 11.7% during the same period.