Leadership

John Schnatter apologizes for using a racial slur

Papa John’s shares fell 5% Wednesday after reports of its founder’s comments surfaced.
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Papa John’s founder John Schnatter on Wednesday acknowledged using a racial slur during a conference call and has apologized for the incident.

“News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true,” Schnatter said in the statement. “Regardless of the context, I apologize. Simply stated, racism has no place in our society.”

Papa John’s stock fell 5% on Wednesday, continuing a lengthy decline as the chain’s same-store sales have fallen and Schnatter’s comments have invited controversy. The stock is down by a third over the last year.

On Wednesday, Forbes reported that Schnatter used the N-word during a media training session, prompting the company’s marketing company, Laundry Service, to end its relationship with the Louisville, Ky.-based pizza chain.

The session was prompted by comments Schnatter made in November during an earnings call, in which he blamed protests by NFL players during the national anthem on the league’s low ratings.

He then blamed those ratings for the chain’s weakening same-store sales. Papa John’s and the NFL have since ended their relationship and Pizza Hut has stepped in to sponsor the league’s games.

Schnatter stepped down as CEO in December, with Steve Ritchie named as his replacement. But Schnatter remains involved in the company as its chairman, and he owns 30% of the company’s stock. His face is on the chain’s logo.

Same-store sales at the chain’s North American locations declined 5.3% in the first three months of the year.

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