Papa John's (PZZA) Enhances Digital Ordering via Facebook

By Zacks Equity Research | Friday, July 14, 2017

Papa John's
A world leader in pizza delivery and digital ordering platforms, Papa John's International, Inc. PZZA , is further expanding its digital ordering capabilities with the launch of Facebook Instant Ordering.

Papa John's national Facebook page now features a "Start Order" button, offering customers another effortless way to place their orders. Further, customers can access "Papa John's Facebook Instant Experience" through their own Timeline's "Order Food" option as well.

Notably, the digital wave has hit the U.S. fast casual restaurant sector with more and more restaurants such as Domino's Pizza, Inc. DPZ and El Pollo Loco, Inc. LOCO deploying technology to enhance guest experience. Papa John's is also investing heavily in technology-driven initiatives like digital ordering to boost sales.

In fact, Papa John's has become first national pizza chain to facilitate instant ordering via Facebook, Inc.'s FB social networking website. Moreover, the company is the first pizza giant to launch a nationwide digital rewards program and to surpass 60% of total U.S. sales via digital channels. It is also the foremost national restaurant chain to launch a custom ordering app for Apple, Inc.'s AAPL TV.

Evidently, the company's online and digital marketing activities have increased significantly over the last several years in response to increasing use of online and mobile web technology.

Altogether, the company's aim to focus on foundational improvements in its digital channels to increase order conversion rate, frequency and ticket average is a positive.

In fact, we believe that the digital leadership is helping Papa John's to expand its brand in the domestic market as well as overseas. This is one of the reasons why Papa John's shares have put up a decent performance in comparison to the Zacks categorized Retail-Restaurants industry, in the past one year. While the stock has been up 8.5%, the industry witnessed a gain of 6.9%.

Meanwhile, though the company's initiatives such as implementation of technology, menu innovation, value offers among others offer long-term advantages, the costs related to them are expected to continue to dampen margins in the near term. Furthermore, the company's large international presence makes it highly vulnerable to foreign exchange headwinds, while a soft industry backdrop is putting pressure on the top line.

Nevertheless, going forward, the extended ways to order a pizza is poised to keep Papa John's in the forefront of digital ordering and customer convenience.

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Papa John's International Inc.
P.O. Box 99900
Louisville, KY

Phone: (502)261-7272

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