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Papa John's CEO Says Chain Had Best Month Ever Due To More Than Just Coronavirus Trends

Papa John's CEO Says Chain Had Best Month Ever Due To More Than Just Coronavirus Trends

Pizza chain Papa John's Int'l, Inc. (NASDAQ: PZZA) recorded its best month ever in April, and its momentum is only partly due to COVID-19 headwinds, CEO Rob Lynch said Wednesday on CNBC's "Power Lunch."

April Momentum For Papa John's 

North American comparable sales rose 27% in April as many consumers pivoted toward delivery options. But only 10% of the same-store sales growth is attributed to the pandemic, which implies double-digit growth built "around other things," Lynch said.

Most notably, the exec cited menu innovation, partnerships with aggregators and a rewards program — all of which he said were in place prior to the outbreak and will remain in place moving forward.

So long as consumers have health and safety-related concerns, they will gravitate toward restaurants best known for contactless delivery options, the CEO said.

"We feel very confident that we have the infrastructure in place to deliver long-term, sustainable growth." 

Papa John's Supply Chain

At a time when some restaurant investors are worried over the supply chain for their holdings, Papa John's is unique, as it is completely vertically integrated, which gives it "a lot of control" over its inputs, Lynch said. 

The pizza chain also started to bolster its supply chain prior to the peak of the pandemic, including stocking up on key ingredients and working with new suppliers, he said.

As such, it "absolutely" has enough meat inventory to ensure sufficient inputs for both pizzas and papadias, he said. 

PPP Update From Papa John's 

Papa John's corporate head office didn't apply for the government's Paycheck Protection Program as the program is meant for companies in "different circumstances," he said.

But the company's franchisees are very much small business owners entitled to "make their own decisions" if they want to take advantage of the loans based on their individual circumstances, Lynch said. 

The stock was up 2.4% at $78.74 at the time of publication Thursday.

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