First-quarter earnings letdown sends Papa John's shares into sharp decline, shedding almost a twentieth of their value.

Table of Contents Papa John’s delivered disappointing first-quarter results on Thursday, sending shares sharply lower. $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 The stock tumbled roughly 4.7% to $32.21 in early trading, extending its year-to-date losses to approximately 20%. 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 estimate. Total revenue registered at $478.6 million, reflecting a 7.7% year-over-year decline and missing analyst forecasts of approximately $485 million. Papa John’s International, Inc., PZZA Bottom-line results showed net income of $7 million, down from $9 million in the comparable period last year. Adjusted EBITDA totaled $48 million, representing a decrease from the prior year’s $50 million. CEO Todd Penegor attributed the soft performance to consumers grappling with persistent inflation. He noted that customers are opting for smaller pizza sizes while eliminating side items and desserts from their orders, pressuring average transaction values. Comparable sales in North America declined 6.4% during the quarter. Penegor indicated this figure aligned with the company’s internal projections. Meanwhile, international operations delivered stronger performance. Markets outside North America recorded a 3.6% increase in comparable sales, representing the sixth consecutive quarter of positive international growth. Global system-wide restaurant sales totaled $1.20 billion, down 3% compared to the same period last year. The company added 28 new locations during the quarter — 8 domestically and 20 in international territories. A portion of the domestic revenue contraction stemmed from strategic refranchising efforts. Papa John’s refranchised 85 locations in the fourth quarter of 2025, which eliminated approximately $25 million from company-operated restaurant revenue in North America. Papa John’s is actively executing a comprehensive restructuring initiative. The plan includes shuttering hundreds of underperforming domestic locations, streamlining the menu offerings, and reducing corporate overhead. Penegor emphasized that management remains focused on enhancing value proposition and driving innovation to attract new customers while boosting incremental purchases. Recently introduced menu items — including pan pizza varieties and oven-toasted sandwiches — have demonstrated encouraging early performance this year. The organization is also pursuing additional expense reductions through supply-chain optimization and operational streamlining. Looking ahead to full-year 2026, Papa John’s reaffirmed its existing guidance. The company anticipates global system-wide restaurant sales will range from flat to a low single-digit percentage decline. North American comparable sales are forecast to decrease 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 sector faces mounting headwinds. Pizzerias, formerly the second-most prevalent restaurant format across the United States, have now fallen behind coffee shops and Mexican restaurant chains in total locations. Domino’s recently lowered its domestic same-store sales forecast after experiencing March softness, pointing to an intensely competitive and price-sensitive operating environment. Papa John’s adjusted earnings per share of $0.32 came in below the $0.37 consensus estimate compiled by FactSet.