PAPA JOHNS ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS
PAPA JOHNS INTERNATIONAL INC (PZZA) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 PAPA JOHNS ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS Updates Fiscal 2026 Outlook Introduces Unbox Better to Strengthen Brand and Franchise System Launches New Marketing Framework with Increased Local Market Franchisee Investment Louisville, Kentucky (November 5,
Facts are quoted from the filing text and checked against it.
How this was made
The 30-second read
Why it matters
The earnings miss and sales decline suggest short‑term weakness, but the announced strategic initiatives may offer a longer‑term upside.
Market read
The release provides fresh earnings data that can drive immediate price action and informs sector outlook.
What to watch
The company highlighted a new 'Unbox Better' initiative and increased local franchisee investment, which could improve future performance.
Papa Johns reported lower third-quarter sales, earnings and adjusted EBITDA amid North America traffic pressure and reduced its fiscal 2026 outlook for global system-wide sales and adjusted EBITDA.
Third-quarter total revenues declined 10.5%, North America comparable sales declined 8.3%, adjusted EBITDA declined to $38.1 million from $47.8 million, and the Company reduced its fiscal 2026 outlook for global system-wide restaurant sales and adjusted EBITDA.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenues, three months ended September 27, 2026GAAP | $454.8M | – | (10.5)% |
| Total revenues, nine months ended September 27, 2026GAAP | $1.42B | – | – |
| Company-owned restaurant sales, three months ended September 27, 2026GAAP | $131.3M | – | – |
| Franchise royalties and fees, three months ended September 27, 2026GAAP | $43.11M | – | – |
| Commissary revenues, three months ended September 27, 2026GAAP | $222.5M | – | – |
| Other revenues, three months ended September 27, 2026GAAP | $21.32M | – | – |
| Advertising funds revenue, three months ended September 27, 2026GAAP | $36.65M | – | – |
| Cost of sales, three months ended September 27, 2026GAAP | $328.6M | – | – |
| General and administrative expenses, three months ended September 27, 2026GAAP | $55.84M | – | – |
| Depreciation and amortization, three months ended September 27, 2026GAAP | $19.24M | – | – |
| Advertising funds expense, three months ended September 27, 2026GAAP | $36.94M | – | – |
| Total costs and expenses, three months ended September 27, 2026GAAP | $440.6M | – | – |
| Operating income, three months ended September 27, 2026GAAP | $14.23M | – | – |
| Net interest expense, three months ended September 27, 2026GAAP | $9.40M | – | – |
| Income before income taxes, three months ended September 27, 2026GAAP | $4.84M | – | – |
| Income tax expense, three months ended September 27, 2026GAAP | $1.56M | – | – |
| Net income, three months ended September 27, 2026GAAP | $3.28M | – | – |
| Net income attributable to common shareholders, three months ended September 27, 2026GAAP | $3.14M | – | – |
| Basic earnings per common share, three months ended September 27, 2026GAAP | $0.09 | – | – |
| Diluted earnings per common share, three months ended September 27, 2026GAAP | $0.09 | – | – |
| Adjusted EBITDA, three months ended September 27, 2026non-GAAP | $38.09M | – | – |
| Adjusted net income attributable to common shareholders, three months ended September 27, 2026non-GAAP | $5.17M | – | – |
| Adjusted diluted earnings per common share, three months ended September 27, 2026non-GAAP | $0.16 | – | – |
| Global system-wide restaurant sales, three months ended September 27, 2026other | $1.15B | – | (5.6)% |
| North America system-wide restaurant sales, three months ended September 27, 2026other | $802.3M | – | (8.8)% |
| International system-wide restaurant sales, three months ended September 27, 2026other | $343.7M | – | 2.8% |
| North America comparable sales, three months ended September 27, 2026other | (8.3)% | – | (8.3)% |
| Domestic Company-owned restaurants comparable sales, three months ended September 27, 2026other | (7.5)% | – | (7.5)% |
| North America franchised restaurants comparable sales, three months ended September 27, 2026other | (8.5)% | – | (8.5)% |
| International comparable sales, three months ended September 27, 2026other | (1.8)% | – | (1.8)% |
| Total comparable sales growth (decline), three months ended September 27, 2026other | (6.5)% | – | (6.5)% |
| Net income, nine months ended September 27, 2026GAAP | $18.92M | – | – |
| Operating income, nine months ended September 27, 2026GAAP | $58.18M | – | – |
| Adjusted EBITDA, nine months ended September 27, 2026non-GAAP | $138.6M | – | – |
| Diluted earnings per common share, nine months ended September 27, 2026GAAP | $0.55 | – | – |
| Adjusted diluted earnings per common share, nine months ended September 27, 2026non-GAAP | $0.94 | – | – |
| Net cash provided by operating activities, nine months ended September 27, 2026GAAP | $58.51M | – | – |
| Purchases of property and equipment, nine months ended September 27, 2026GAAP | $39.31M | – | – |
| Free cash flow, nine months ended September 27, 2026non-GAAP | $19.20M | – | – |
| Cash, cash equivalents, and restricted cash as of September 27, 2026GAAP | $26.76M | – | – |
| Long-term debt, less current portion, net as of September 27, 2026GAAP | $700.1M | – | – |
| Current portion of long-term debt as of September 27, 2026GAAP | $11.25M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Domestic Company-Owned RestaurantsRevenue declined primarily due to approximately $26 million of lower revenues related to 113 restaurants that were refranchised subsequent to the third quarter of 2025 and 7.5% lower comparable sales. | $128.0M | – | – |
| North America FranchisingNorth America Franchising revenues decreased primarily due to lower comparable sales at franchised restaurants. | $30.2M | – | – |
| North America CommissariesNorth America Commissary revenues decreased primarily due to lower volumes, partially offset by higher pricing. | $244.1M | – | – |
| InternationalInternational revenues remained flat. | $45.00M | – | – |
| All OtherRevenues increased primarily reflecting higher advertising funds revenue driven by discretionary Company contributions to the Papa Johns Marketing Fund, partially offset by lower digital fees. | $73.42M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal 2026 outlook
- Tax rate30% to 34%
- NoteGlobal system-wide restaurant sales: Down ~5%
- NoteNorth America comparable sales: Down ~8%
- NoteInternational comparable sales: Flat to Up 1%
- NoteNorth America gross openings: 40 to 50
- NoteInternational gross openings: 180 to 220
- NoteAdjusted EBITDA: Approximately $175 million
- NoteAdjusted Depreciation and amortization: $70 million to $75 million
- NoteInterest expense (net): $35 million to $40 million
- NoteCapital expenditures: $70 million to $80 million
- NoteDiluted shares outstanding: Approximately 33 million
Capital returns
- Dividends paid to common stockholders, nine months ended September 27, 2026: $(30,864)
- Dividends paid to common stockholders, nine months ended September 28, 2025: $(45,817)
What drove it
- Global system-wide restaurant sales were down 5.6%, primarily due to lower comparable sales in North America and a decline in global net restaurants on a trailing twelve-month basis.
- The Company opened 47 restaurants system-wide, including 11 in North America and 36 in International markets.
- North America system-wide restaurant sales declined 8.8% to $802.3 million, while International system-wide restaurant sales increased 2.8% to $343.7 million.
- The Company introduced Unbox Better, centered on strengthening the brand and franchise system, with increased local marketing investment by franchisees to complement national marketing initiatives.
- Lower cost of sales and lower depreciation and amortization expenses partially offset the effect of lower sales on net income.
Concerns
- North America comparable sales declined 8.3%, including a 7.5% decline at Domestic Company-owned restaurants and an 8.5% decline at North America franchised restaurants.
- Total revenues declined $53.3 million, or 10.5%, reflecting refranchising transactions and lower performance in North America.
- Adjusted EBITDA declined $9.7 million to $38.1 million, primarily attributable to lower sales and volumes in North America.
- Free cash flow was $19.2 million for the nine months ended September 27, 2026, compared with $59.2 million in the comparable prior-year period.
- The Company reduced its fiscal 2026 outlook for global system-wide restaurant sales to Down ~5% and adjusted EBITDA to Approximately $175 million.
- System-wide restaurant count declined by 9 during the third quarter and by 25 over the trailing four quarters.
What to watch
- North America comparable sales under the revised fiscal 2026 outlook of Down ~8%.
- Execution of Unbox Better, including core product improvements, operational actions and the new marketing framework.
- The impact of increased local market franchisee investment alongside national marketing initiatives.
- International comparable sales, guided at Flat to Up 1% for fiscal 2026.
- Progress toward 40 to 50 North America gross openings and 180 to 220 International gross openings.
- Free cash flow and capital expenditures under the $70 million to $80 million fiscal 2026 capital-expenditure outlook.
Balance sheet and cash flow
- Cash, cash equivalents, and restricted cash as of September 27, 2026: $26,760
- Cash, cash equivalents, and restricted cash as of December 28, 2025: $36,950
- Long-term debt, less current portion, net as of September 27, 2026: $700,138
- Long-term debt, less current portion, net as of December 28, 2025: $710,436
- Current portion of long-term debt as of September 27, 2026: $11,247
- Net cash provided by operating activities for the nine months ended September 27, 2026: $58,509
- Net cash used in investing activities for the nine months ended September 27, 2026: $(18,825)
- Net cash used in financing activities for the nine months ended September 27, 2026: $(49,668)
- Change in cash, cash equivalents, and restricted cash for the nine months ended September 27, 2026: $(10,190)
Analysis
Papa Johns reported a weak third quarter as North America demand remained under material pressure. Total revenues were $454,843, down 10.5%, while global system-wide restaurant sales were $1.15 billion, down 5.6% excluding foreign currency. North America comparable sales declined 8.3%, with declines of 7.5% at Domestic Company-owned restaurants and 8.5% at North America franchised restaurants. International comparable sales also declined 1.8%, although International system-wide restaurant sales increased 2.8% to $343.7 million.
The revenue decline reflected both underlying sales weakness and the refranchising of 113 restaurants subsequent to the third quarter of 2025. Domestic Company-owned restaurant revenue declined principally from approximately $26 million of revenue associated with those refranchised restaurants and lower comparable sales. Commissary revenues decreased primarily due to lower volumes, partially offset by higher pricing, while franchising revenues declined with lower comparable sales. International revenues remained flat, and All Other revenues increased with higher advertising funds revenue, partly offset by lower digital fees.
Profitability also weakened. Operating income was $14,233 versus $16,171, net income was $3,281 versus $4,473, and adjusted EBITDA was $38,085 versus $47,759. Lower cost of sales and lower depreciation and amortization partly offset the sales decline. Adjusted diluted earnings per common share fell to $0.16 from $0.32. For the nine-month period, free cash flow was $19,202 compared with $59,190, with the Company citing compensation payments, Enterprise Transformation Plan payments, National Marketing Fund cash-payment timing and lower net income.
Unit development did not offset the sales pressure. The Company opened 47 restaurants system-wide during the quarter but closed 56, resulting in a net decline of 9 restaurants. The system ended the quarter with 5,969 restaurants. North America declined by 34 net restaurants during the quarter, while International added 25 net restaurants.
Management reduced its fiscal 2026 outlook for global system-wide restaurant sales to Down ~5% from Down 2% to 4%, North America comparable sales to Down ~8% from Down 6% to 8%, and adjusted EBITDA to Approximately $175 million from $180 million to $190 million. The Company is responding with Unbox Better, a marketing framework that combines increased local franchisee marketing investment with national marketing, product improvements and operational actions. Execution against those actions and the revised North America sales outlook are the central operating issues for the balance of fiscal 2026.
Management, verbatim
Papa Johns is entering the next phase of its transformation with Unbox Better, a plan built around two priorities: strengthening our brand by giving customers more compelling reasons to choose Papa Johns and strengthening our system to consistently deliver on the expectations we create.
Todd Penegor, President and CEO
While our third-quarter results reflect continued pressure in a competitive operating environment, we have aligned our company and franchisees behind a clear strategy for growth, supported by a new marketing framework led by increased local marketing investment by our franchisees to complement our national marketing initiatives.
Todd Penegor, President and CEO
Not in the filing
stated, not guessed- Gross margin was not reported.
- Quarterly operating cash flow was not reported.
- Quarterly free cash flow was not reported.
- Share repurchases were not reported.
- A separately provided previous earnings release outlook section was not provided for formal actual-versus-prior-guidance comparison.
- Prior-year values for global system-wide restaurant sales in dollars were not reported.
- Year-over-year percentage changes were not printed for individual revenue and expense line items in the condensed consolidated statements of operations.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Papa John's filed a Form 8‑K announcing its Q3 2026 financial results, including revenue, net income, and adjusted EBITDA figures.
Ticker impact
Papa John's reported Q3 2026 results showing a 5.6% drop in system-wide sales and a decline in net income to $3.3M.
likely downward pressure as the market prices in weaker sales and earnings.
Revenue and earnings fell year-over-year; comparable sales declined across both company‑owned and franchised locations, indicating reduced demand.
Market effects
The quick‑service restaurant sector may see broader pressure as comparable sales weakness is highlighted.
North America franchisees face the biggest sales decline, potentially affecting regional consumer‑spending sentiment.
International sales were flat, but the overall decline may temper investor enthusiasm for the broader restaurant industry.
Counterpoint
If the new marketing framework gains traction, the stock could rebound despite the current sales dip.
Key entities
- ExecutiveTodd Penegor
President and CEO of Papa John's who outlined the Unbox Better strategy.
