The moment a company starts prioritizing its stock price over its product quality, it’s headed in the wrong direction. It’s the beginning of the end.
We learned that over thirty-four years building Papa John's – from a broom closet in the back of my father’s tavern in Jeffersonville, Indiana, into a global brand. And in those years we came to understand something Wall Street tends to overlook: customers know before shareholders do. So do the employees and franchisees who see the business up close every day.
Long before a stock falls, customers notice. They notice when the product is mediocre, when the service isn't as strong, and if the company has lost sight of the uniqueness that made it successful in the first place. By the time investors see it on an earnings report, customers have known it for years – in Papa John’s case, four straight years of declining traffic and sales. That's because shareholder value isn't the objective; it’s the result. "Better Ingredients. Better Pizza." wasn't just an advertising slogan — it was the standard behind every decision we made. Every choice came down to one question: Does this make the pizza and the guest experience better?
Quality is never the expensive part. Losing customer loyalty is. When we got the product right, then everything else followed. Customers came back, franchisees grew, employees built careers, and shareholders were rewarded. I always called that win-win-win.
Because of this lack of focus on what matters, sales have declined, and with it, profitability. This decline in profitability has been drastic. Profits don’t decline at the same rate as sales – they fall much more drastically in response to declining sales due to fixed costs (operating leverage). This lowered profitability means an ever-increasing number of stores are losing money. Lower sales also means fewer ad dollars to spend, which in turn could lead to even lower sales – a downward spiral from which it is tough to recover.
I have been trying to give the company a friendly heads up about this reality for years.
In 2021, I wrote that, “Papa John's can't succeed as long as it remains in conflict with its own brand.” The stock price that July reached $111.27. Two years later, I wrote that Papa John’s was facing decline because it had "lost its ‘point of differentiation.’" The stock price at that time was $82.87. In November 2025, I once again wrote that, “it’s been years since Papa John’s competed on quality positioning... Instead, the company has been chasing Earnings Per Share (EPS), sales gimmicks, and lower price points. As a result, Papa John’s has lost its point of differentiation.” By then, the stock price had plummeted to $41.26. Today it’s hovering around $30 and may be heading south.
The company that once traded above $140 per share now trades near $30, with roughly $4 billion in shareholder losses – more than three-quarters of shareholder value gone from its peak. The dividend yield has climbed above 6 percent, a clear distress signal, and the company will likely be forced to cut the dividend simply to stay inside its loan covenants. A cut would almost certainly trigger a further tailspin in the stock and deepen the loss of confidence among investors and Wall Street analysts.
No founder wants to watch a company that so many people poured their lives into lose its way. I no longer own a single share of Papa John's, but I'll always care about the franchisees who invested their savings, the employees who built careers, and the communities — including Louisville — that grew alongside the business.
The team members and franchisees believed in something more important than a stock price and dividends. They believed in the company, its quality, and its customers. Many have paid a price for decisions that, in my opinion, were avoidable. They deserved better.
Customers don't abandon great companies. Previously great companies abandon their customers by abandoning their principles first.
