As pizza customers remain focused on value this year, Papa Johns saw its North American same-store sales slide by 4% in the second quarter of 2024, according to its latest earnings report.

It was the second straight quarter of lower comp sales for the chain, CFO Ravi Thanawala noted in an earnings call to investors last week. “This was primarily driven by lower transactions as continued growth in our aggregator channel was more than offset by a decline in our organic delivery,” Thanawala said. “And while sales were solid with customers buying two or more pieces, we saw lower transactions in our lower ticket items.”

Compared to the second quarter of 2023, Papa Johns’ same-store sales were down 4% for domestic, company-owned stores and 3% for franchised restaurants in North America.

Thanawala said consumers “have become more deliberate in managing their overall ticket and are showing a preference for brands that are offering compelling value. While we know we offer an attractive value for our customers, our marketing and innovation…have primarily focused on premium product offerings at premium price points. As a result, our price value perception is not as strong as it should be in this unique environment.”

In the second quarter, he added, Papa Johns began focusing on initiatives “that improve our value perception while still protecting our brand positioning.”

The brand had success with its $9.99 Cheesy Burger Pizza LTO, launched in June, while its New York-style pizza, selling for $10.99, returned at a “more competitive price point than last year.” He added that Papa Johns has seen its value perception improve over the past eight weeks, suggesting that “if we maintain an appropriate balance of value offerings and premium products, it will lead to improved sales trends over time.”

Menu innovation has been key to the chain’s strategy over the past two years, with 2023 seeing a range of new items, such as the Crispy Parm Pizza, the Cool Ranch Doritos Papadia and the Cheesy Calzone Epic Stuffed Pizza.

In 2024, balancing innovation with a value price point will be the big challenge. “We know that driving trial of our product is critical to winning consumers’ wallets in the future,” Thanawala said. “At our company-owned restaurants, we are also testing various value offers in certain markets to analyze the repeat rates, identify potential basket starters and larger basket motivators.”

Papa Johns recently hired a new president/CEO, Todd Penegor, to steer the ship, but he mostly let Thanawala—who had been serving as interim CEO—lead the August 8 earnings call. In his brief comments, Penegor said, “Our brand and core product remain in demand in the highly competitive pizza category. But we know there’s more work to be done to realize the full potential of the Papa Johns’ brand. We are sharpening our focus, investing in digital and accelerating development through improved economics. We are also evolving our marketing to ensure we meet consumers’ value expectations by prioritizing customer experience, franchisee success and operational excellence.”