Despite all efforts to rehabilitate his brand, Pope John is still paying for the insulting remarks of his founder.
On Tuesday, the company reported that sales in the same store in North America fell by 10.5% in July and by 6.1% in the last quarter.
"The results were challenged by recent events," Steve Ritchie, president and CEO Pope John (, the statement said. "Our entire leadership team understands the importance of improving our culture and business." )
Shares fell more than 10% after closing.
On the phone with analysts Richie said that the partners concerned Papa John agreed with the company to release Schnatter from the public eye.
"I spent a considerable amount of time in recent weeks in this area, talking to our franchisees, our customers, our drivers and employees," he said. "Franchisees and partners have expressed tremendous support … our decision to remove John as a representative of the brand."
"We are not dependent and should not be on the same face," he said.
A few days after the eruption of the racial scandal, Pope John announced that he would remove the image of Schnater from his marketing materials, where he held a prominent position. A special committee of the board of directors will oversee the research of the external auditor of the Pope John's culture, including the company's existing processes, policies and systems related to diversity and inclusion.
Richie said that Pope John decided to distance himself from Schnater after he said in November that the protests of the NFL are hurting sales,
"The research and analysis we conducted after the comments of our founder in November 2017 made it clear that we need to move away from the marketing plan based on the founders," Richie said. "Obviously, recent events have once again confirmed that we need to move on."
Ritchie noted that comparable sales have fallen since November. In December last year, Schnater left the executive branch in his namesake.
But Schnatter, who said he regrets his resignation from his position as chairman, does not go away without a fight. He remains on the board and owns a 29% stake in the company. He has filed a lawsuit against the company, demanding to see company documents "because of the inexplicable and brutal way that the company treated him after publishing a story that falsely accused him of using racial skin."
Pope John denied Schnater's statement in his statement. The company said that she was "saddened and disappointed" in the suit, which he called "useless and wasteful."
Schnatter expressed concern about the state of health of the company in a statement published on Tuesday.
"History shows that the company works better with me, and it refuses when I leave," he said.
– This report was attended by CNN Jordan Valinsky and Jackie Wattles.
CNNMoney (New York) First published August 7, 2018: 4:51 pm Eastern Time