Pizza chain to close up to 50 locations as sales slump

• Papa Murphy's, known for its take-and-bake pizza model, is 'suffering a little bit more' in the competitive pizza environment according to MTY CEO Eric Lefebvre
• The 68 total store closures across MTY's portfolio lost over $10 million collectively in the past year, with Papa Murphy's representing a significant portion but not the majority of losses
• The closure process will take six to nine months to complete, with the first series of stores scheduled to close within days of the announcement

Summary

Key Development: MTY Food Group, the Canadian parent company of Papa Murphy's pizza chain, announced plans to close 45-50 Papa Murphy's locations due to poor performance in a highly competitive pizza market.

Company Details: Papa Murphy's operates a unique "take-and-bake" model where customers order pizzas online, by phone, or in-store, then cook them at home. MTY Food Group owns and franchises these locations.

Financial Impact: Across MTY's entire brand portfolio, the company is shuttering 68 underperforming stores that collectively lost over $10 million in the past 12 months, with performance continuing to deteriorate. While Papa Murphy's represents a significant portion of the closures, CEO Eric Lefebvre noted these locations don't account for the majority of losses.

Management Strategy: MTY initially repossessed three clusters of struggling stores attempting turnarounds, but after nearly two years of restructuring efforts, concluded these markets were unsuitable for the Papa Murphy's concept. The closure process will take 6-9 months, with the first wave scheduled for next week.

Market Implications: The closures reflect intensifying competition in the pizza sector and challenges facing non-traditional pizza concepts. MTY is taking a methodical approach to wind down operations, negotiating with landlords and managing distribution impacts. Management indicated potential for additional store closures or sales where strategically appropriate, though emphasized this isn't a "fire sale."

Outlook: Leadership views the closures as necessary for long-term business health, despite near-term impacts on store count. MTY stock (ticker: MTY) last traded at $23.51, up 1.29%.