Papa John’s Stock Sinks After CEO Leaves for Shake Shack

Shares of Papa John’s International (PZZA) dipped more than 5% in intraday trading Thursday after Shake Shack Inc. (SHAK) announced the pizza giant’s chief executive would be taking the same position at the hamburger chain.

Shake Shack said Papa John’s chief executive Rob Lynch would replace Randy Garutti, who has been with the company since its inception and served as CEO since 2012. Garutti had announced in December that he would be stepping down this year. Lynch, who will be the first outsider to lead Shake Shack, takes over May 20. 

Lynch became Papa John’s CEO in 2019 and will be acting in an advisory role until April 30. The pizza chain said the board has chosen CFO Ravi Thanawala as interim chief and is conducting a comprehensive search to find a new leader.

Shake Shack founder and chair Danny Meyer explained Lynch’s appointment “marks the beginning of our next chapter of growth as we seek to further elevate Shake Shack as a leading global brand.” 

Shares of Shake Shack had traded at their highest level in almost three years before turning lower. Despite the slight dip, the company’s stock is still up nearly 50% so far this year.

Papa John’s shares have lost more than 10% year-to-date.