Papa John's — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for the three months ended September 27, 2026, were $454.8 million, a 10.5% decrease from $508.2 million in the prior year period.
• Net income for the quarter was $3.3 million, down from $4.5 million in the prior year quarter.
• Adjusted EBITDA for the quarter was $38.1 million, a decrease of $9.7 million compared to $47.8 million in the prior year quarter.
• Diluted earnings per common share were $0.09 for the quarter, compared to $0.13 in the prior year quarter.
• Adjusted diluted earnings per common share were $0.16 for the quarter, compared to $0.32 in the prior year quarter.
• For the nine months ended September 27, 2026, total revenues were $1.42 billion, down from $1.56 billion in the prior year period.
• Net income for the nine months was $18.9 million, compared to $23.5 million in the prior year period.
• Adjusted EBITDA for the nine months was $138.6 million, down from $150.0 million in the prior year period.
• Free cash flow for the nine months ended September 27, 2026, was $19.2 million, a decrease from $59.2 million in the prior year period.
• Cash, cash equivalents, and restricted cash were $26.8 million as of September 27, 2026, compared to $37.0 million as of December 28, 2025.
• Long-term debt, less current portion, was $700.1 million as of September 27, 2026, compared to $710.4 million as of December 28, 2025.

Guidance and Future Outlook:

• The Company updated its 2026 annual guidance for global system-wide restaurant sales to a decrease of approximately 5%, revised down from the prior outlook of a 2% to 4% decrease.
• North America comparable sales guidance for 2026 was updated to a decrease of approximately 8%, revised down from a 6% to 8% decrease.
• International comparable sales guidance for 2026 was updated to flat to up 1%, revised down from a 1% to 3% increase.
• Adjusted EBITDA guidance for 2026 was lowered to approximately $175 million, revised down from a range of $180 million to $190 million.
• North America gross openings guidance for 2026 remains unchanged at 40 to 50.
• International gross openings guidance for 2026 remains unchanged at 180 to 220.
• Adjusted depreciation and amortization, interest expense, GAAP effective tax rate, capital expenditures, and diluted shares outstanding guidance remain unchanged.

Business Segments and Product Lines:

• Global system-wide restaurant sales were $1.15 billion for the quarter, a 5.6% decrease compared to the prior year.
• North America comparable sales decreased 8.3%, driven by a 7.5% decline in Domestic Company-owned restaurants and an 8.5% decline in North America franchised restaurants.
• International comparable sales decreased 1.8% for the quarter.
• The Company opened 47 new restaurants system-wide during the quarter, including 11 in North America and 36 in International markets.
• As of September 27, 2026, there were 5,969 Papa John's restaurants operating in 51 countries and territories.
• Domestic Company-owned restaurant sales decreased 7.5% in comparable sales, with revenue declines attributed to 113 refranchised restaurants and lower comparable sales.
• North America Commissary revenues decreased $15 million, primarily due to lower volumes, partially offset by higher pricing.
• North America Franchising revenues decreased $5 million, primarily due to lower comparable sales at franchised restaurants.
• All Other business unit revenues increased $5 million, driven by higher advertising funds revenue from discretionary Company contributions, partially offset by lower digital fees.
• The Company introduced "Unbox Better," a transformation plan focused on strengthening the brand and franchise system through product improvements, operational actions, and a new marketing framework.

Market and Competitive Landscape:

• The operating environment remains competitive, with continued pressure on sales performance.
• Global system-wide sales declines were primarily due to lower comparable sales in North America and a decline in global net restaurants on a trailing twelve-month basis.
• International system-wide sales increased 2.8% to $343.7 million, while North America system-wide sales decreased 8.8% to $802.3 million.

Risks and Challenges:

• The Company faces challenges related to a competitive operating environment and declining comparable sales in North America.
• Refranchising transactions that occurred subsequent to the third quarter of 2025 impacted revenue comparability and sales figures.
• Risks include deteriorating economic conditions, softening consumer sentiment, aggressive competitor pricing, and changes in consumer preferences.
• Operational risks include labor cost increases, commodity costs, supply chain disruptions, and inflation.
• The Company faces risks related to cyber-attacks, geopolitical conflicts, and potential economic recessions.

Management Commentary and Tone:

• CEO Todd Penegor stated the Company is entering the next phase of its transformation with "Unbox Better," aiming to turn the promise of "Better" into a customer experience.
• Management acknowledged continued pressure in the competitive environment but expressed confidence in a clear strategy for growth supported by increased local marketing investment by franchisees.
• The strategy includes core product improvements and operational actions designed to strengthen competitive position and drive sustainable growth.

Other Key Points:

• The Company hosted a conference call with analysts on November 5, 2026.
• The Company is the world's third-largest pizza delivery company.
• The press release includes forward-looking statements regarding business performance, transformation plans, and financial measures.
• Non-GAAP financial measures, including Adjusted EBITDA and Adjusted Diluted EPS, are provided alongside GAAP measures.
• The Company incurred restructuring costs associated with the Enterprise Transformation Plan and other costs related to project-based strategic initiatives and natural disaster damages.
• Free cash flow decreased primarily due to timing of compensation payments, payments related to the Enterprise Transformation Plan, timing of National Marketing Fund payments, and lower net income, partially offset by decreased capital expenditures.