PZZA · Papa John's International, Inc.

Papa John's Q1 2026 results showed revenue declining 7.7% to $478.6 million, primarily from a $31 million drop at Domestic Company-owned restaurants due to the Q4 2025 refranchising of 85 units and 5.2% lower comparable sales, alongside an $18 million decrease in North America commissary revenues from food cost deflation, subsidies, and lower volumes. These were partially offset by a $4 million International revenue increase. Global system-wide sales fell 3% to $1.20 billion, with North America down 6% to $868.9 million and International up 6% to $333.4 million, reflecting divergent regional performances amid a cautious consumer environment in North America. Net income dropped to $6.9 million from $9.3 million, driven by lower sales but mitigated by reduced cost of sales (from refranchising, lower volumes, and deflation) and G&A expenses (no repeat of prior-year franchisee conference). Adjusted EBITDA declined slightly to $47.8 million. CEO Todd Penegor noted strong International momentum with six quarters of positive comps, while North America met expectations; the company is advancing transformation via value options, innovation, Toy Story 5 partnership, and Google Gemini digital enhancements. Free cash flow turned negative at $(6.2) million versus $19.1 million prior year, due to lower net income, compensation payments, and higher capex. The firm reiterated FY2026 guidance, signaling confidence despite near-term pressures, with 28 net new restaurants opened (8 North America, 20 International) and total units at 6,020.