Papa John’s (PZZA) CEO Rob Lynch sees an opportunity to leverage artificial intelligence to generate even tastier sales, especially from an impressive base of 30 million loyalty members.
“We’ve only scratched the surface,” Lynch said on Yahoo Finance Live (video above). “We have to be careful to make sure we are doing it the right way. But extracting insights from analytics is a huge opportunity for us to improve and drive more frequency.” “
During an earnings call last week, Mr. Lynch acknowledged that Papa John’s has been slow to use profitable data to upsell customers and win more orders. New AI tools sweeping the tech industry could unlock the inherent value of Papa John’s vast datasets.
To kickstart the course correction, Lynch said he just hired former Chipotle marketer Mark Shambula as chief marketing officer.
“[Loyalty members] They have agreed to allow us to retrieve their data so that we can better serve their needs. ‘ he said. “I think we have a huge opportunity to do that. It will be a key differentiator for us from the rest of the restaurant industry.”
Papa John’s has continued to thrive under Mr. Lynch, despite not fully leveraging the data. Lynch joined the company in August 2019 amidst the turmoil following the ouster of founder John Schnatter.
Lynch has rebooted its menu innovations, recently seen with the launch of its Doritos-flavored pizza sandwich. The company also benefited from a delivery boom due to the COVID-19 pandemic.
North American same-store sales increased 30% on average over the three years to 2022. On the same basis, overseas same-store sales he increased by 20%.
Papa John’s stock is up 83% since Lynch took over as CEO in 2019, outpacing the S&P 500’s 45% gain. Domino’s Pizza (DPZ), meanwhile, rose just 36%.
But investors will want Lynch to reignite revenue growth, and using technology is one way to do that.
Same-store sales were flat year-on-year in the first quarter, while overseas sales fell 6% as the pandemic dampened the dining boom and slowed the economy.
“Papa John’s recent performance and growth pattern [was] Advantage over the largest pizza delivery industry peers [Domino’s]We believe this highlights certain differences/advantages that Papa John’s can leverage in the current environment (third parties, product innovation, etc.),” Jefferies analyst Alexander Slagle said in a customer note. wrote to
But Slugglu added that in Papa John’s case, “it’s likely he doesn’t have immunity.” [to the current environment]This could provide some downside to more optimistic expectations. “
Brian Sotzi Executive editor at Yahoo Finance. Follow Sotzi on Twitter @BrianSozzi and further LinkedIn. Any tips on deals, mergers, activist status, etc.? Email brian.sozzi@yahoofinance.com
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