In this segment of the Motley Fool Money radio show, host Chris Hill, Million Dollar Portfolio's Jason Moser and Matt Argersinger, and Total Income's Ron Gross check in on the pizza wars, which delivered some cheesy drama this week.
When Papa John's (NASDAQ: PZZA) reported disappointing Q3 results, it tried to pin the blame on the NFL for not dealing more firmly or effectively with players using their national stage to protest racial injustice. Then Yum! Brands (NYSE: YUM) came out and threw a flag on its rival's play for unbusinesslike conduct.
A full transcript follows the video.
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This video was recorded on Nov. 3, 2017.
Chris Hill: The Pizza Wars are heating up. On Wednesday, Papa John's reported third quarter results, lowered guidance, and blamed the NFL for their struggles. Found are CEO John Schnatter said the NFL and its leadership hurt the company by not resolving the player protests that have been taking place during the national anthem. On Thursday, Yum! Brands' third quarter report featured strong results from Pizza Hut, and when analysts asked, Pizza Hut executives said the NFL is having no impact on their sales. I was fascinated to watch this little drama play out, in part because I just felt like Papa John's was getting ahead of themselves. It seems like a not very great excuse. Like, put the politics of the issue aside, I just don't know why they would come out and say that, because we're not talking about that many days in the quarter.
Ron Gross: I think they need to be careful. They're not seeing the bigger picture. The bigger picture is, they've tied their wagon to the NFL for the last seven years as the official pizza of the NFL, and viewership is down. And viewership is not down because of this controversy here. It's down for many reasons, among them being, we're all watching TV differently nowadays. TV viewership in general is down. And if that's who their wagon is tied to, they need to rethink their marketing campaign or they're going to continue to suffer.
Jason Moser: We're also living in the age of GrubHub. You can have anything delivered at this point. It's not just pizza anymore. I think that's playing out not only with Papa John's, but Domino's Pizza, all of them.
Hill: I was just going to say, Domino's seems to have no trouble putting up comps of, I don't know, 8% or higher quarter after quarter. Real quick, before we get to the stocks on our radar, what is your go-to pizza, Jason? Just for toppings.
Moser: You know, at the end of the day, keeping it simple, you have to go with the Neapolitan Margherita. Sauce, some buffalo mozzarella, some basil, and let it rock.
Matt Argersinger: I like Canadian bacon. It's hard to find now and then, but I do.
Argersinger: Oh, yeah, I'm only in Canadian bacon.
Moser: What's wrong with regular bacon?
Argersinger: There's something about the Canadian bacon, I don't know. Saltiness?
Moser: It's ham.
Argersinger: It's sharp ham. Hard ham. Crusty ham.
Hill: It's like ham on steroids, but not steroids. I get what he's saying. I'm just perplexed by what appears to be a lack of Canadian bacon in America.
Argersinger: I can't find it!
Hill: That seems like an opportunity for someone. Ron Gross.
Gross: I'm a New Yorker, man. Give me the pepperoni!
Hill: [laughs] And you make it yourself, right? You're handy in the kitchen.
Gross: Of course.
Chris Hill has no position in any of the stocks mentioned. Jason Moser has no position in any of the stocks mentioned. Matthew Argersinger has no position in any of the stocks mentioned. Ron Gross has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.