Shares of pizza carryout and delivery chain Papa John's International (NASDAQ:PZZA) traded sharply lower today on the back of downbeat earnings and sales news.

CEO John Schnatter and team dressed the earnings release up a bit, tossing in some silliness about a blind taste test just before a paragraph discussing lowered earnings guidance. An accounting change will also result in a one-time charge against earnings when the company reports fiscal third-quarter results.

But the proof is in the press release, where the company complained of a difficult operating environment and continued trouble with same-store sales. This is old news for a company that has seen its shares fall sharply since mid-2002 amid competition and a slowing economy. Yum! Brands' (NYSE:YUM) Pizza Hut has experienced similar trouble maintaining domestic comps.

Does Papa John's prolonged slump represent an opportunity for investors?

Drawing a sample from Rick Aristotle Munarriz's July " Pizza Toss-Up," Papa John's does trade at a discount -- on a trailing 12-month earnings per share basis -- to Yum!. Likewise to CEC Entertainment (NYSE:CEC), CaliforniaPizza Kitchen (NASDAQ:CPKI) and Chicago Pizza & Brewery (NASDAQ:CHGO). Its 12-month price-to-sales ratio is lower than all but CEC Entertainment.

Still, given the range of businesses represented here, the common thread of pizza isn't enough to make extensive comparative analysis particularly valuable. (Yum!, for example, also operates Taco Bell and KFC, while CCE runs the Chuck E. Cheese chain.) What we really need are signs that the company is ready to turn things around.

Papa John's does have a history of generating free cash flow in excess of reported net income and has demonstrated the ability to manage operating expenses. What a wary investor should look for now is concrete evidence of store-level improvement and profit growth on a quarter-to-quarter basis.

Sadly, that's something Papa John's has yet to demonstrate and a particular concern given the ferocity of competition in the food service businesses.

Dave Marino-Nachison can be reached at