Papa Murphy’s has ‘disappointing’ 3Q

Vancouver-based pizza purveyor Papa Murphy’s announced Wednesday that it sustained a net loss of $421,000, or 3 cents per diluted share, on lower per-store sales for its fiscal third quarter ended Sept. 26.

Revenue for the quarter was $28.5 million, an increase of 1.4 percent compared with the third quarter of 2015.

However, comparable domestic store sales fell 5.8 percent year-over-year, including 5.6 percent at franchise-owned stores and 7.7 percent at company-owned stores. Papa Murphy’s opened 26 new stores in the quarter, 24 of which are in the United States.

Adjusted EBITDA earnings were $4.8 million, compared with $6.1 million the previous year.

“We had a disappointing quarter,” said Ken Calwell, president and chief executive officer, in a statement. Calwell cited an increasingly competitive pizza industry and the difficult advertising environment during a presidential campaign year. Advertising is considered to be a driving factor in pizza sales.

Calwell said Papa Murphy’s will launch its first national television advertising campaign in 2017. The campaign will include at least six full weeks of advertising. He said that company executives believe the campaign will result not only in increased sales of Papa Murphy’s pizzas to consumers, but also sales of store franchises, and will also raise brand awareness.

Papa Murphy’s has more than 1,570 franchised or company-owned stores selling take-and-bake pizza in the United States, Canada and the United Arab Emirates. The company’s shares closed at $4.70 Wednesday, down 64 cents, on the Nasdaq exchange.