Papa Murphy’s could be for sale

The pizza chain is exploring strategic alternatives, which could include a sale.
Photograph: Shutterstock

Papa Murphy’s, the struggling take-and-bake pizza chain, could be up for sale after the company said Wednesday that it is exploring strategic alternatives.

The Vancouver, Wash.-based company said those alternatives could include “a possible sale of the business,” though it noted that there is no specific timetable for any transaction “and there is no assurance that any transaction will be completed.”

The company has hired North Point Advisors to be the financial adviser for the strategic review.

The announcement came as Papa Murphy’s announced that its same-store sales declined 2.1% in the third quarter ended Oct. 1.

Papa Murphy’s has been struggling for years, and even that negative same-store sales number was the company’s best performance in 12 quarters. Weldon Spangler, Papa Murphy’s CEO, said in a statement that sales trends have turned positive thus far in the fourth quarter.

The company has also been shrinking: Unit count over the past year has declined by 82 locations, to 1,460. Franchisees operate all but 113 of the locations.

“Sales trends have continued to improve and are currently tracking slightly positive through the first five weeks of the fourth quarter,” Spangler said in a statement.

Papa Murphy’s would become the latest publicly traded chain to be put up for sale, following the recent sale agreements at Zoes Kitchen, Bojangles' and Sonic Corp.

Papa Murphy’s said its revenue declined 15% in the quarter to $28.8 million from $33.7 million due largely to the refranchising of 29 locations and the closure of six additional restaurants. The company reported a net loss of $600,000, or 4 cents per share, narrower than the $2.7 million loss in the same quarter a year earlier.

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