Papa John’s International, Inc. (NASDAQ:PZZA) Q3 2023 Earnings Call Transcript

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Rob Lynch: Yes, Brian, I would say all of the above. I mean, I view our loyalty platform as a strategic tool for us to make sure that we hold on to our most valuable customers. Our loyalty members are our most frequent and highest ticket customers. And so, we don’t get to market to them and reach them in the same way through our aggregator channel. So, we need to make sure that we have shored up our loyalty platform both from a value standpoint, but also from an incentive standpoint. The offerings that we provide, the incentives that we give them to order from us versus other channels, so that work is all underway right now and so our intent is for that to have an impact and be realized both externally as well as the benefit internally when we continue to leverage the data that we get from all of those transactions. So, that’s going to come to fruition here in 2024.

Operator: And our next question comes from Lauren Silverman from Deutsche Bank. Your line is now open.

Lauren Silverman: I wanted to ask about the expectations for 2024 North America comps and how you’re thinking about the composition between traffic and price. And then Rob, if I can just follow up on your commentary around the strong value proposition for a family, do you think that Papa John’s or I mean even the pizza category in general is getting the credit it deserves value? Is there more that you can do to better communicate that?

Rob Lynch: Yes. I think we’re doing a pretty good job of communicating it. That’s why we drove the most transactions last quarter, almost highest transaction growth last quarter in the segment. So, we can always get better and we’re continuing to learn through all of the data that we get from all of our channels. But we’re going to be focused on the same strategy that has delivered fourth consecutive years of same store sales growth. I think the only one and the national pizza category to do that. So, we’re going to deliver premium innovation and we’re going to continue to offer values. You can still get a large one topping pizza at Papa John’s carryout special under $10 in all of our company restaurants. So, I think we do offer a lot of great value for the customers that need it.

That’s just not what we advertise because we’re focused on delivering and premium innovation that delivers top-line sales growth. So that strategy is in place we guided. Next year, we still feel great about our 2% to 4% guide long-term. We guided towards the lower end for next year. That composition we don’t see changing materially versus what we’ve delivered this year. We have a lot of momentum continuing to drive transaction growth. Ideally, we’d be able to incorporate some pricing into there to mitigate any cost inflation that we see. Right now, we’re not anticipating significant levels of inflation similar to which is a departure from what we’ve seen over the last 18 to 24 months. So, it’s going to be a balanced approach that I think will deliver that positive same-store sales growth.

Operator: Thank you. And I am showing no further questions. I would now like to turn the call over to Rob Lynch for closing remarks.

Rob Lynch: Well, thanks everyone for participating on the call. I hope you agree it was a really strong quarter, particularly for our North America business. And despite the volatility that everyone is talking about in the international markets, we continue to see positive growth ahead for the brand. I’d like to thank everyone for your continued interest in Papa John’s. I’d also like to thank our team members and franchisees. They continue to show unbelievable resiliency and agility during these unique times for all of us. So, I look forward to connecting again and sharing our 2023 results with you in February. Thank you.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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