Papa John’s still struggling post-scandal

Papa John’s continues to struggle with the fallout from its founder’s noisy departure, but its CEO says a new ad campaign is helping turn things around.

The pizza chain said Tuesday it lost $13 million in the third quarter, a 160 percent decline from the July-September period a year ago.

Earnings, adjusted for non-recurring costs, were 20 cents per share. That fell short of Wall Street’s forecast of 22 cents, according to FactSet. Revenue dropped 16 percent to $364 million, also missing analysts’ estimates.

North American same-store sales plummeted 9.8 percent in the third quarter. It was the fourth straight quarter of declines in the region, which houses most of the company’s 5,247 restaurants. International same-store sales also fell.

Papa John’s well-publicized struggles with its founder, John Schnatter, have been a drag on sales all year.

Schnatter stepped down as CEO late last year after he blamed disappointing sales on NFL player protests because the chain advertises heavily during football games. Then, in July, Schnatter resigned as chairman after it was revealed he used the a racial slur during a conference call.

Schnatter remains Papa John’s largest shareholder, with control of 31 percent of its shares, and he has been vocal in his criticism of the company. A spokesman said he had no comment on Tuesday.

Steve Ritchie, who was named Papa John’s CEO in December, didn’t mention Schnatter’s name in a conference call with investors on Tuesday. But he said he is confident the chain will be able to shift the conversation.