A legendary pizza chain is shuttering hundreds of locations across 17 states as competition intensifies. Papa John's is following through on its plans to close around 300 stores across North America.
And, as reported by the New York Post, there are around 50 locations that have already shut their doors. The closures have focused on Texas, California, Florida, and Arizona.
Other key states with several Papa John's closures include Michigan, North Carolina, and Virginia.
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Papa John's Originally Announced the Closure Back in February
They announced that they were going to be ruthless with closures. They were targeting underperforming restaurants. The specific ones they plan on shuttering were "franchise-owned, more than a decade old, and generated less than $600,000 in annual sales volumes."
Papa John's CFO, Ravi Thanawala, revealed an explanation behind the closures in a statement. "We believe these closures will further strengthen the system, increasing AUVs by at least 3 percent and improve franchisee health by allowing franchisees to reallocate resources towards operational excellence in their remaining restaurants and open units in priority restaurants."
He wanted to clarify that Papa John's as a brand is not in peril. In fact, in his words, the vast majority have "performed well over the years and delivered strong returns" for their owners. Thanawala said that the shutttering of these ineffective restaurants was "among the most impactful actions we can take to improve restaurant profitability and fleet health."
The Stocks Say Otherwise
But that's not necessarily what the stock portfolio is saying.
Shares of Papa John's International are down 21 percent year to date. And that's not even the worst part, because they're down 69% in the past five years.
And things are also looking bad on the corporate side of things, too. Papa John's reported that they laid off around 7 percent of their corporate workforce.
There are several reasons behind the stock's freefall in the past five years. But the most important of these is that pizza just isn't as relevant anymore.
While the vast majority of people have fond memories of visiting a pizza restaurant when they were young, like the iconic Pizza Huts from the 90s, that just isn't the case anymore. They're now outnumbered by more chic places like Mexican restaurants and coffee shops.
