Hollis Johnson
Pizza Hut is cashing in on Papa John's struggles.
- Pizza Hut's NFL sponsorship - which it took over from Papa John's earlier this year - is set to have a "meaningful and lasting impact" on sales, according to BTIG analyst Peter Saleh.
- Papa John's is expected to lose an estimated $320 million in US sales in 2018, a significant amount of which Pizza Hut is likely to steal.
- Pizza Hut has avoided controversy with its NFL sponsorship so far, while Papa John's remains entrenched in scandal.
Pizza Hut is cashing in on Papa John's downward spiral.
The pizza chain's NFL partnership "should have a meaningful and lasting impact on same-store sales," BTIG analyst Peter Saleh wrote in a note to clients on Wednesday. The deal seems to be off to a strong start, driving improvements in how people perceive Pizza Hut and customer response to the chain.
"The commentary leads us to believe the NFL partnership is helping Pizza Hut begin to turn the corner on sales for the first time in many years," Saleh writes.
Pizza Hut is set to see a bump of another 80 to 90 basis points - almost a 1% sales jump - from Papa John's downward spiral, according to Saleh.
BTIG estimates that Papa John's same-store sales will decline by 7.5% in 2018, a $320 million drop in US system sales. Many of those millions of dollars will likely end up in Pizza Hut's hands.
Pizza Hut has staunchly avoided mixing politics with football, a trap that Papa John's fell into last year.
"If you look at how we're approaching our partnership with the NFL, it's very different from how our previous sponsor approached it," Marianne Radley, Pizza Hut's chief brand officer, told Business Insider. "It's all about the fans. We're doing as much as we can to enhance that fan experience."
Papa John's sparked backlash when founder and then-CEO John Schnatter (who has since been ousted from Papa John's after using the N-word in a company conference call) criticized the league's treatment of protests, with the company ending its longtime sponsorship months later. Radley said that Pizza Hut plans to avoid engaging in such controversy by focusing "on the fans."