Market Overview

Papa John's Founder Resigns Following Backlash Of His Racial Slur

Share:
Papa John's Founder Resigns Following Backlash Of His Racial Slur
Related PZZA
Earnings Scheduled For November 6, 2018
Stifel: Papa John's Story Is Now 'Takeout Or Delivery'
All Eyes On Walmart, Volkswagen And A Jedi Contract (Stocks To Watch Podcast) (Seeking Alpha)

UPDATE: Schnatter resigned as chairman of Papa John's late Wednesday night. The company said in a statement they will appoint a chairman in the coming weeks.

Papa John's International, Inc. (NYSE: PZZA) founder and chairman John Schnatter has been heavy in the limelight this past year. And not in a good way.

What Happened

After some publicity issues with the NFL and its commissioner Roger Goodell, Schnatter stepped down as CEO of the pizza company back in January.

Just when it seemed that the dust was settling, Forbes reported Wednesday that Schnatter used racist language during a May conference call between Papa John's executives and their marketing agency Laundry Service. The conference call was intended to serve as a simulation to practice public-relations situations.

The exercise obviously didn't have much success, as Schnatter reportedly used the N-word and described racial violence that he had personally witnessed, in detail.

According to Forbes, Schnatter defended his actions by saying his intent of the comments was to show how strongly he disliked racism.

Why It's Important

According to a statement released by the company, “Papa John’s condemns racism and any insensitive language, no matter the situation or setting. ... We take great pride in the diversity of the Papa John’s family, though diversity and inclusion is an area we will continue to strive to do better.”

Laundry Service has devised a plan to terminate its contract with the pizza company.

“News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true," Schnatter said in a statement released by Papa John's Wednesday afternoon. "Regardless of the context, I apologize. Simply stated, racism has no place in our society.”

What's Next

Papa John's shares dropped as much as 6 percent Wednesday, which accounts for nearly $96 million in market value.

At time of publication, shares were trading around $49.37, down 2.8 percent on the day. Shares were trading above the $70 level one year ago.

Related Links:

Papa John's Out, Pizza Hut In: The NFL Has A New Official Pizza Sponsor

Schnatter Blames NFL For Slowing Pizza Sales; Should He Really Blame Netflix?

Image credit: Mr. BlueMauMau, Flickr

Posted-In: ForbesNews Restaurants Top Stories Movers Media Trading Ideas General Best of Benzinga

 

Related Articles (PZZA)

View Comments and Join the Discussion!

Jason's Picks: $150 Off A Portable Honda Generator

Mid-Day Market Update: Crude Oil Down Over 2%; Simulations Plus Shares Plunge