Louisville, Kentucky — Shares of Papa John’s International Inc. dropped 15% on Tuesday after Apollo Global Management withdrew its bid to take the pizza chain private. Investors reacted sharply to the news, reflecting concerns about the company’s current market position and financial health.

The private equity firm had proposed acquiring Papa John’s for $64 per share, but the offer has since been rescinded, as reported about a week ago. Apollo had previously partnered with Irth Capital Management for this bid, but it appears the companies have opted to step back from the deal. Neither Apollo nor Papa John’s offered immediate comments regarding the development.

This news comes as Papa John’s prepares to release its third-quarter earnings report on Thursday. Over the past year, the company’s stock has plummeted nearly 30%, raising alarm bells among investors over its future performance. The ongoing struggles within the restaurant sector have been largely attributed to rising inflation and increased operational costs, which have pressured consumer spending.

Broader industry trends reveal that many consumer-oriented businesses are facing challenges. Last week, executives from Chipotle reported a 0.8% decline in customer traffic for the third consecutive quarter, signaling a significant pullback among consumers across various income levels. Additionally, Procter & Gamble indicated earlier this month that lower-income consumers are trimming their spending sharply, posing further challenges for brands reliant on discretionary purchases.

Adding to the complexities in the restaurant industry, Yum Brands announced plans earlier on Tuesday to explore strategic options for Pizza Hut, which has struggled in recent years. This wave of shifting strategies highlights the broader pressures domestic restaurant chains are experiencing amid changing consumer behaviors and economic uncertainty.

Analysts suggest that Papa John’s could face additional scrutiny during its upcoming earnings call, where investors will be eager to understand the company’s strategies for navigating this turbulent landscape. With growing competition and an evolving market environment, the chain’s path forward remains uncertain.

The ongoing developments at Papa John’s signal a crucial juncture for the company, illustrating the difficulties faced across the industry as it adapts to new economic realities. As the pizza giant prepares to divulge its quarterly performance, many will be watching closely to see how it plans to reposition itself amidst these challenges.