It's not getting any easier for embattled pizza chain Papa John's.
The company is widely expected to deliver terrible earnings Tuesday night that show a continued slide in pizza sales, a steep drop in profit and trouble with its franchise owners during the third quarter — making finding a potential buyer all the more difficult. Further clouding its future to survive on its own, Papa John's lenders cut its credit lines and raised its borrowing rates last month.
Analysts are projecting revenue to fall by about 9 percent, from $431.7 million during the same quarter last year to an estimated $393.7 million, according to estimates compiled by Refinitiv. Earnings are expected to take an even harder hit, from 60 cents a share a year ago to 22 cents a share during the third quarter.
Those results will further complicate its efforts to find a buyer without having solved the thorny question of what to do with its cantankerous founder, John Schnatter, people briefed on the process say. A public battle with the former chairman and CEO has pummeled the company's shares, which have fallen 7 percent so far this year and about 40 percent from their all-time high of $90.49 in Dec. 2016.
Papa John's ousted Schnatter as its chairman in July after a conference call leaked in which he used a racially charged slur. Since then, the company has been embroiled in a public relations nightmare that's included a war of words and two lawsuits. That drama came as the company was already struggling to compete against more innovative competitors like Domino's.