TLDR
- Papa John’s Q1 adjusted EPS came in at $0.32, missing the $0.37 estimate by $0.05
- Revenue fell 7.7% year-over-year to $478.6 million, below the $485 million forecast
- North America comparable sales dropped 6.4%; international comparable sales rose 3.6%
- CEO Todd Penegor cited budget-conscious consumers trading down to smaller pizzas and skipping sides
- PZZA stock fell roughly 4.7% to $32.21 on Thursday, extending a near 20% year-to-date decline
Papa John’s kicked off Thursday with a rough earnings report, and the stock paid the price.
$PZZA earnings:
Papa John’s Turnaround Gains Traction as NA Comps Turn Positive, But Investments Continue to Squeeze Profits
This was an encouraging quarter for Papa John’s, showing the first tangible signs that its turnaround strategy is working. The bull case is… pic.twitter.com/LZ1OEwh6vV
— Finsee (@Finsee_main) August 7, 2025
PZZA dropped around 4.7% to $32.21 shortly after the opening bell, adding to a nearly 20% decline since January 1.
The company posted adjusted earnings of $0.32 per share for Q1 2026, missing the Wall Street consensus of $0.37. Revenue came in at $478.6 million, down 7.7% from the same quarter last year and below analyst expectations of around $485 million.
Papa John’s International, Inc., PZZA
Net income fell to $7 million from $9 million a year ago. Adjusted EBITDA came in at $48 million, down from $50 million in the prior-year period.
CEO Todd Penegor pointed to inflation-weary consumers as a key drag. Customers are ordering smaller pizzas and skipping sides and desserts, which is weighing on average ticket sizes.
North America Struggles While International Holds Up
North America comparable sales fell 6.4% in the quarter. Penegor said the number was in line with internal expectations.
International markets told a different story. Comparable sales rose 3.6% outside North America, marking the sixth straight quarter of positive international comparable sales growth.
Global system-wide restaurant sales came in at $1.20 billion, down 3% year-over-year.
The company opened 28 new restaurants in the quarter — 8 in North America and 20 internationally.
Part of the domestic revenue drop was tied to refranchising. Papa John’s refranchised 85 restaurants in Q4 2025, which removed roughly $25 million from domestic company-owned restaurant revenue.
Turnaround in Progress
Papa John’s is in the middle of a broader restructuring. The company is closing hundreds of domestic stores, trimming the menu and cutting corporate headcount.
Penegor said the focus remains on improving value perception and pushing innovation to bring in new customers and drive add-on sales.
New product rollouts — including pan pizzas and oven-toasted sandwiches — have shown early traction this year.
The company is also targeting additional cost savings through supply-chain improvements and operational efficiencies.
For full-year 2026, Papa John’s maintained its outlook. It expects global system-wide restaurant sales to be flat to down in the low single-digits.
North America comparable sales are projected to fall 2% to 4%, while international comparable sales are expected to rise 2% to 4%.
Adjusted EBITDA guidance remains at $200 million to $210 million, with a midpoint of $205 million.
Pizza as a category is under broader pressure. Pizzerias, once the second-most common restaurant type in the U.S., are now outnumbered by coffee shops and Mexican food chains.
Domino’s last month cut its U.S. same-store sales outlook after March softened, citing a competitive and price-sensitive environment.
Papa John’s adjusted EPS of $0.32 missed the $0.37 estimate, per FactSet data.
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