Papa John's drops after report alleges chairman used racial slur

Shares of Papa John's International Inc <PZZA.O> pizza chain down 3.5 pct to a more-than-two-year low on Wednesday a report that Chairman, founder and former CEO John Schnatter used a racial slur on a conference call

Forbes reported that Schnatter used the offensive term for black people on a call with a marketing agency aimed at preventing future public-relations crises

According to the report, Schnatter complained that in the past, "Colonel Sanders" used the racist term without facing a public backlash 

RELATED: Check out the 13 chains taking over the U.S.:

13 chains taking over the US
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13 chains taking over the US

#1: Subway

Total stores in 2016: 26,932

Photo credit: Reuters

#2: YUM! Brands

Total stores in 2016: 17,504

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#3: McDonald's

Total stores in 2016: 14,155

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#4: Dollar Tree

Total stores in 2016: 14,108

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#5: Dollar General

Total stores in 2016: 13,322

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#6: Starbucks

Total stores in 2016: 13,172

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#4: Dunkin' Brands Group

Total stores in 2016: 11,366

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#8: CVS Caremark 

Total stores in 2016: 9,769

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#9: 7-Eleven

Total stores in 2016: 8,256

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#10: Burger King

Total stores in 2016: 8,121

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#11: Walgreens Boots Alliance

Total stores in 2016: 8,053

Photo credit: Reuters

#12: Verizon Wireless

Total stores in 2016: 6,839

Photo credit: Reuters

#13: Wendy's

Total stores in 2016: 5,739

Photo credit: Getty



Schnatter stepped down as CEO of PZZA in January after he came under fire for blaming soft pizza sales on the National Football League's handling of national anthem protests by players

In a statement, PZZA said: "Papa John's condemns racism and any insensitive language, no matter the situation or setting. ... We take great pride in the diversity of the Papa John's family, though diversity and inclusion is an area we will continue to strive to do better."

PZZA is a favorite among short sellers, with more than 22 pct of the free float sold short, according to S3 Partners data

Stock is now at its lowest since Feb 2016 and is off 45 pct from record high close in Dec 2016; YTD shrs down 12.8 pct vs 3.9 pct gain for the S&P 500 <.SPX>

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