Pizza chain Papa John’s International Inc. (PZZA, Financial) announced Dec. 21 its founder, John Schnatter, is stepping down as CEO, but will remain on the board as chairman.
While the reason for his departure was not disclosed, it follows controversial comments he made last month criticizing the National Football League’s response to players protesting the national anthem. A prominent NFL sponsor, he said the league’s handling of the situation led to subpar third-quarter sales, which impacted the company’s full-year revenue guidance.
The Louisville, Kentucky-based company’s stock was down more than 3% on Friday morning following the announcement.
Schnatter is being succeeded by Steve Ritchie, who has been with the company since 1996, became chief operating officer in 2014 and was promoted to president in 2015.
In a prepared statement, Schnatter praised Ritchie and the dynamic he will bring to the company.
“He has excelled at every job he's ever held at Papa John's - from being an hourly customer service rep, to a delivery driver, store general manager, director of operations, franchisee and most recently President," he said. "With 120,000 Papa John's corporate and franchise employees, Steve will put the spotlight on our pizza and the most important ingredient - our team members."
As CEO, Ritchie will spearhead Papa John’s global development as well as marketing and the digital and customer experience. His main focus, however, will be on the company’s employees.
“By focusing on our team members, we will deliver the world class experiences our customers deserve,” Ritchie said. “At Papa John's, any opportunity is achievable if you dedicate yourself to putting your best foot forward every day. I'm certain our future company leaders are delivering pizzas in one of our 5,000 stores around the world right now."
As for Schnatter, he will continue to promote the company as chairman while pursuing his personal interests of entrepreneurship, leadership development and education.
Papa John’s was trading around $57.05 on Friday with a market cap of $2.03 billion, a price-earnings ratio of 20.04 and a price-sales ratio of 1.22. GuruFocus estimates the stock has lost 33% year to date.
Disclosure: I do not own any stocks mentioned.
