Tayler Smith of Papa Murphy’s sprinkles cheese while creating a pizza in 2016 at Papa Murphy’s on East Mill Plain Boulevard. Amanda Cowan/The Columbian
Vancouver-based home-bake pizza seller Papa Murphy’s closed out the second quarter of 2018 in the black, a modestly promising sign in the recovery effort for a business that took heavy hits last year.
The company posted a net income of nearly $1.4 million for the period from May to July, compared with a net loss of $6.01 million during the same period last year. Papa Murphy’s did see a slight downturn from the start of the year, however, when they closed out the first quarter with a net gain of $1.5 million.
Though stabilizing, the company is shedding stores to cut expenses. Second-quarter expenses added up to just $27.5 million, slashed from $42.8 million over the same period in 2017. Driving that reduction was a net decrease of 73 stores — 27 company-owned and 46 franchised.
In a Wednesday conference call to discuss the quarter’s results, Chief Executive Officer Weldon Spangler lauded the company’s shift to a new online ordering system, olo.com.
The second quarter “was our first full quarter on our new online platform, and we were extremely pleased with both the stability and performance of the system given the pressure testing that received on a few of our highest volume days in the year,” Spangler said. “Overall, online order mix continues to increase, and we have further enhanced efforts to drive customer traffic online through a number of key marketing initiatives.”
Papa Murphy’s “will continue to aggressively push more of our business online,” Spangler said, and plans to relaunch a mobile app later this year.
The company also hopes to increase its delivery options “and are on track to offer delivery in about half of our stores by year end,” Spangler said.
The business is aiming for a 95 percent franchise model by 2020, with only 50 company-owned stores remaining.
Now entering its fourth year as a publicly traded company, the take-and-bake pizza chain weathered a rough ride. Upon its debut on the Nasdaq exchange, executives projected the number of stores would more than triple, from 1,400 to 4,500. Instead, the quarter closed out with 1,477 Papa Murphy’s locations.
For the remainder of the year, Papa Murphy’s projections estimate the following:
• Store sales will modestly decline in the single digits.
• Approximately 10 new franchise stores will open.
• Full-year selling, general and administrative expenses will total $49 million,
