Papa John’s blames founder scandal for sharp decline in sales: reports

Pizza chain Papa John’s said Tuesday that its sales fell 10.5 percent in July, with CEO Steve Ritchie reportedly blaming the company’s struggles on the scandal concerning founder John Schnatter’s use of the N-word.

Papa John’s sales fell 6.1 percent in the second quarter overall at North American stores, and its shares fell by about 9 percent on Tuesday.

“Results have been challenged by recent events,” Ritchie said in a statement, according to CNN. “Our entire leadership team understands the importance of getting our culture and business improvements right.”

{mosads}Schnatter resigned from his position as chairman last month after it was reported that he used a racial slur during a conference call. He apologized upon resigning but has since said that the public didn’t understand the context in which he used the slur.

Schnatter also said last month that he should return as the face of the company because his “persona resonates with the consumer.”

In a statement on Tuesday, Schnatter said he is concerned about the direction of the company under Ritchie, according to CNBC.

“The financial results announced today further exemplify that concern,” Schnatter said.

Before resigning as chairman, Schnatter had already stepped down as the company’s CEO last year after facing criticism for saying that NFL players protesting the national anthem caused sales to decline for Papa John’s, a sponsor of the NFL.