Papa John’s (PZZA) Stock on Fire: What’s Behind the Rally?

Key Catalysts

Meanwhile, Papa John’s continues to invest in direct customer delivery. In March 2020, the company re-engineered its ordering and delivery process with the launch of no contact delivery. Notably, it drove substantial gains in satisfaction metrics and delivered seamless customer experience during the second quarter.

The company remains focused on product introduction to drive growth. Notably, menu innovations like Garlic Parmesan Crust, toasted handheld Papadias and Jalapeno Popper Rolls continue to witness solid popularity among customers, thereby driving the top line. Backed by better brand positioning, the new products have driven higher ticket and traffic across dayparts without cannibalizing core premium products and complexing operations at other stores.

In July 2020, the company in collaboration with Shaquille O’Neal (Papa John’s board member and restaurant owner) launched a new Shaq-a-Roni pizza. Markedly, the launch has struck the right chord with consumers and generated more than $2 million in charitable contributions.

Strong sales building initiatives and digitalization drove the company’s comparable restaurant sales in second-quarter 2020. The company recorded positive comparable sales growth in second-quarter 2020, which marks the second straight quarter of comps growth. Global restaurant sales climbed 19.1% against the year-ago quarter’s fall of 3.8%. Further, domestic company-owned restaurant comps rose 22.6% in the reported quarter against a decline of 6.8% in the year-ago quarter.

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