Key Takeaways
- First quarter adjusted earnings per share reached $0.32, falling short of analyst expectations by $0.05
- Total revenue declined 7.7% from last year to $478.6 million, missing the $485 million projection
- Comparable sales in North America slid 6.4%; international markets showed 3.6% growth in comparable sales
- Chief Executive Todd Penegor attributed weakness to cost-conscious diners opting for smaller pizzas and fewer extras
- Shares of PZZA dropped approximately 4.7% to $32.21 on Thursday, compounding a year-to-date loss nearing 20%
Papa John’s delivered a disappointing quarterly performance on Thursday, sending shares lower in morning trading.
The stock declined roughly 4.7% to $32.21 following the market open, building on what has already been a challenging year with losses approaching 20% since the start of January.
For the first quarter of fiscal 2026, the pizza chain reported adjusted earnings of $0.32 per share, falling short of the Street’s $0.37 consensus forecast. Total revenue registered at $478.6 million, representing a 7.7% year-over-year decrease and trailing analyst projections of approximately $485 million.
Papa John’s International, Inc., PZZA
Net earnings dropped to $7 million compared to $9 million in the same period last year. Adjusted EBITDA totaled $48 million, a decline from the previous year’s $50 million.
Chief Executive Todd Penegor highlighted inflation-pressured consumers as a primary headwind. Diners are downsizing their pizza orders and cutting back on additional items like sides and desserts, creating downward pressure on average transaction values.
Domestic Weakness Contrasts With International Strength
Comparable sales across North America decreased 6.4% during the quarter. Penegor noted this figure aligned with the company’s internal projections.
International operations presented a markedly different picture. Comparable sales in markets outside North America climbed 3.6%, representing the sixth consecutive quarter of positive international comparable sales momentum.
System-wide restaurant sales globally totaled $1.20 billion, reflecting a 3% year-over-year contraction.
The company added 28 new restaurant locations during the period — 8 across North America and 20 in international territories.
A portion of the domestic revenue decline stemmed from refranchising efforts. Papa John’s completed the refranchising of 85 locations in the fourth quarter of 2025, which eliminated approximately $25 million from company-owned restaurant revenue in the domestic segment.
Transformation Strategy Underway
Papa John’s continues executing a comprehensive transformation plan. The initiative includes shuttering hundreds of underperforming domestic locations, streamlining the menu offerings and reducing corporate workforce levels.
Penegor emphasized the company’s continued commitment to enhancing value perception and driving innovation to attract new customers while encouraging higher-margin add-on purchases.
Recent product introductions — such as pan pizza options and oven-toasted sandwiches — have demonstrated encouraging early momentum in 2026.
The organization is also pursuing additional expense reductions through supply-chain optimization and operational efficiency initiatives.
For the complete 2026 fiscal year, Papa John’s reaffirmed its previous guidance. Management anticipates global system-wide restaurant sales to range from flat to down in the low single-digit percentages.
North America comparable sales are forecast to decline between 2% and 4%, while international comparable sales are expected to increase 2% to 4%.
Adjusted EBITDA guidance remains unchanged at $200 million to $210 million, with a midpoint target of $205 million.
The broader pizza category faces mounting challenges. Pizzerias, which previously ranked as the second-most prevalent restaurant format across the United States, have now been surpassed by both coffee establishments and Mexican cuisine chains.
Domino’s recently reduced its domestic same-store sales guidance after March performance weakened, pointing to an intensely competitive and price-conscious operating environment.
Papa John’s adjusted earnings per share of $0.32 represented a miss against the $0.37 Wall Street estimate, according to FactSet data.
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