To the head of Papa John’s, NFL player protests have had a negative impact on his company’s bottom line. For Pizza Hut, however, they don’t appear to have been any problem at all.
That’s according to Greg Creed, CEO of Yum! Brands, the umbrella corporation that owns Pizza Hut as well as fast-food chains such as Taco Bell and KFC. Regarding the protests, he said Thursday (via CNBC), “We’re not seeing any impact from any of that on our business.”
Creed was speaking on a conference call, in which he touted Pizza Hut’s continued growth. The company grew by 1.0 percent in the most recent quarter, defying forecasts of an 0.7 percent decline (via CNBC), while posting five straight quarters of positive same-store sales growth.
That’s in contrast with Papa John’s, which cut its earnings growth expectations for the year and saw its stock fall by about 10 percent Wednesday. In reaction, CEO John Schnatter said, “NFL leadership has hurt Papa John’s shareholders.”
“This should have been nipped in the bud a year and a half ago,” Schnatter added of the protests. “Like many sponsors, we are in contact with the NFL and, once the issue is resolved between the players and the owners, we are optimistic that the NFL’s best years are ahead. But good or bad, leadership starts at the top, and this is an example of poor leadership.”
Another Papa John’s executive, chief operating officer Steve Ritchie, made the case Wednesday that, as the official pizza company of the NFL, its fortunes are tied to the league. Ritchie said he expected the earnings decline for Papa John’s “to persist” until “a solution is put in place” by the NFL for its player protests.
Pizza Hut is an official sponsor of the NCAA, not the NFL, but like many companies of its ilk, it benefits from football fans ordering food during games. Its 1.0 percent quarterly growth rate was actually the same as that of Papa John’s, but expectations were higher for the latter company, which had sales growth of 5.5 percent over the same period last year.
The NFL’s TV ratings have declined sharply over the past two seasons. “Last year, the ratings for the NFL went backwards because of the elections. This year, the ratings are going backwards because of the controversy,” Schnatter said.
An executive at Kohl’s told CBS News that his company was looking forward to working with the NFL on a holiday ad campaign. “What we see is a lot of our shoppers and prospective shoppers are watching NFL, so that is what is behind the decision,” chief marketing officer Greg Revelle said. “We are very confident.”
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