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Papa Johns Announces Second Quarter 2025 Financial Results

North America Comparable Sales Increased 1%; International Comparable Sales Increased 4%

Diluted EPS of $0.28; Adjusted Diluted EPS of $0.41^(a)

Updates Fiscal 2025 Outlook to Raise International Comparable Sales Range

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Papa John鈥檚 International, Inc. (Nasdaq: PZZA) (鈥淧apa Johns^庐鈥�) (the 鈥淐ompany鈥�) today announced financial results for the second quarter ended June 29, 2025.

Highlights

• North America comparable sales increased 1% from a year ago as Domestic Company-owned restaurants were flat and North America franchised restaurants were up 1%; International comparable sales increased 4% compared with the prior year second quarter.
• Opened 45 new restaurants system-wide, comprised of 19 restaurant openings in North America and 26 restaurant openings in International markets.
• Global system-wide restaurant sales were $1.26 billion, a 4%^(b) increase compared with the prior year second quarter, driven by higher comparable sales and trailing twelve-month net restaurant growth.
• Total revenues of $529 million increased 4% compared with the prior year second quarter, primarily due to higher Commissary revenues.
• Net income was $10 million compared with $13 million in the prior year second quarter and adjusted EBITDA^(a) was $53 million compared with $59 million in the prior year quarter.
• Diluted earnings per common share was $0.28 compared with $0.37 in the prior year second quarter; adjusted diluted earnings per common share^(a) was $0.41 compared with $0.61 last year.

CEO Commentary

鈥淧apa Johns second quarter results exceeded our expectations and are evidence that our strategy is working. We returned to comparable sales growth in North America and achieved strong sales growth internationally, driven by transaction gains as we win more customer visits with a focus on our core pizza business,鈥� said Todd Penegor, President and CEO.

鈥淥ur progress in the second quarter reinforces my confidence that we are on the right track to deliver significant, sustainable profitable growth and increased value for all Papa Johns stakeholders,鈥� Penegor added.

Results for the three and six months of 2025 are not directly comparable with the three and six months of 2024, as year-over-year comparisons are impacted by the UK restaurant closures and refranchising transactions that occurred in the second and third quarters of 2024.

Second Quarter 2025 Results

Revenue: Total revenues of $529.2 million increased $21.3 million, or 4.2%, in the second quarter of 2025 compared with the prior year period. The higher revenues were largely attributable to a $20.3 million increase in Commissary revenues, reflecting both higher volumes and pricing during the quarter. Also contributing to the higher revenues, but to a lesser extent, was a $2.7 million increase in Other revenues, primarily reflecting higher digital fees, a $2.2 million increase in Advertising funds revenues, primarily driven by higher advertising contribution rates in certain International markets, and a $1.8 million increase in Franchise royalties and fees, driven by higher comparable sales and global restaurant growth on a trailing twelve-month basis.

The above revenue increases were partially offset by a $5.7 million decrease in Company-owned restaurant revenues, largely attributable to a decrease of $8.2 million in revenues from our International Company-owned restaurants, primarily related to lower revenues from our Company-owned restaurants in the UK, as 105 formerly Company-owned restaurants were refranchised or closed prior to the second quarter of 2025. The decline was partially offset by a $2.6 million increase at our Domestic Company-owned restaurants primarily due to comparable sales growth as a result of higher average ticket, slightly offset by the refranchising of 15 restaurants in the prior year.

System-wide sales: For the second quarter of 2025, Global system-wide restaurant sales were $1.26 billion, up 4%^(b) compared with the prior year second quarter, driven by higher North America and International comparable sales and 2% global net restaurant growth on a trailing twelve-month basis. North America system-wide sales increased 3%^(b) to $928 million and International system-wide sales increased 7%^(b) to $328 million in the second quarter of 2025, compared with the prior year period.

Net income: Second quarter Net income was $9.7 million, a $2.9 million decrease compared with the prior year second quarter, as higher revenues were more than offset by higher G&A expenses related to incremental investments in marketing and our loyalty program as well as a $3.7 million increase from higher incentive compensation under the Company鈥檚 Management Incentive Plan as well as higher cost of sales driven by higher food and labor costs at the Company-owned restaurants. In addition, Net income reflects slightly lower interest expense driven by lower average interest rates during the quarter and slightly lower tax expense, due to lower pre-tax income, compared with the second quarter of 2024.

Adjusted EBITDA: Adjusted EBITDA^(a) was $52.6 million, a $6.3 million decrease from the prior year second quarter. The decrease was primarily attributable to higher revenues more than offset by higher G&A expenses largely related to incremental investments in marketing and the Company鈥檚 loyalty program along with higher incentive compensation under the Company鈥檚 Management Incentive Plan, as well as higher operating costs at the Company-owned restaurants.

The variance between Net income and adjusted EBITDA was primarily due to non-GAAP adjustments of $4 million of stock-based compensation, $2 million of International restructuring costs in the UK, and approximately $3 million associated with losses on disposal of equipment in connection with the termination of a COVID-era equipment program, compared with the prior year second quarter.

Earnings per share: Diluted earnings per common share was $0.28 for the second quarter of 2025 compared with $0.37 in the second quarter of 2024. Adjusted diluted earnings per common share^(a) was $0.41 for the second quarter of 2025 compared with $0.61 in the second quarter of 2024. These changes were driven by the same factors impacting Net income and adjusted EBITDA^(a) as discussed above.

Refer to the Management鈥檚 Discussion and Analysis of Financial Condition and Results of Operations section of our Quarterly Report on Form 10-Q filed with the SEC for additional information concerning our operating results for the three and six months ended June 29, 2025.

2025 Outlook

The Company is reiterating its 2025 annual guidance for the following metrics and raising the range for International comparable sales:

• System-wide sales: Up 2% to 5%
• North America comparable sales: Flat to up 2%
• International comparable sales: Up 2% to 4% (previously flat to up 2%)
• Restaurant development:
  • North America: 85 to 115 gross openings
  • International: 180 to 200 gross openings
• Adjusted EBITDA (as defined below): $200 million to $220 million
• Depreciation & amortization: $70 million to $75 million
• Interest expense: $40 million to $45 million
• Effective tax rate: 28% to 32%
• Capital expenditures: $75 million to $85 million

Adjusted EBITDA represents Net income before Net interest expense, Income tax expense, Depreciation and amortization, Stock-based compensation expense, and other adjustments that vary from period to period in accordance with the Company鈥檚 Non-GAAP policy. The Company believes adjusted EBITDA is a meaningful measure as it is widely used by analysts and investors to value the Company and its restaurants on a consistent basis. Adjusted EBITDA is not a term defined by GAAP, and is not intended to be a substitute for operating income, net income, or cash flows from operating activities, as defined under generally accepted accounting principles. As a result, our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies.

This release includes forward-looking projections for certain non-GAAP financial measures, including adjusted EBITDA. The Company excludes certain expenses and benefits from adjusted EBITDA that, due to the uncertainty and variability of the nature and amount of those expenses and benefits, the Company is unable to, without unreasonable effort or expense, provide a reconciliation to Net income of those projected measures.

Global Restaurant Sales Information

Global restaurant and comparable sales information for the three and six months ended June 29, 2025, compared with the three and six months ended June 30, 2024 are as follows (See 鈥淪upplemental Information and Financial Statements鈥� below for related definitions):

Global Restaurants

As of June 29, 2025, there were 5,989 Papa Johns restaurants operating in 50 countries and territories, as follows:

Free Cash Flow

Free cash flow, a non-GAAP financial measure which the Company defines as net cash provided by operating activities (from the Condensed Consolidated Statements of Cash Flows) less the purchases of property and equipment, excluding purchases of property and equipment related to damages from natural disasters, was $36.5 million for the six months ended June 29, 2025, compared with $12.8 million in the prior year period. The year-over-year change primarily reflects the timing of cash payments for the National Marketing Fund and improved working capital.

We view free cash flow as an important financial measure because it is one factor that management uses in determining the amount of cash available for discretionary investment. Free cash flow is not a term defined by GAAP, and as a result, our measure of free cash flow might not be comparable to similarly titled measures used by other companies. Free cash flow should not be construed as a substitute for or a better indicator of the Company鈥檚 performance than the Company鈥檚 GAAP measures.

Cash Dividend

The Company paid cash dividends of $15.3 million ($0.46 per common share) in the second quarter of 2025. On August 1, 2025, our Board of Directors declared a third quarter dividend of $0.46 per common share. The dividend will be paid on August 29, 2025 to stockholders of record as of the close of business on August 18, 2025.

Conference Call

Papa Johns will host a call with analysts today, August 7, 2025, at 8:00 a.m. Eastern Time. To access the conference call or webcast, please register online at: . A replay of the webcast will be available two hours after the call and archived on the same web page.

About Papa Johns

Papa John鈥檚 International, Inc. (Nasdaq: PZZA) opened its doors in 1984 with one goal in mind: BETTER INGREDIENTS. BETTER PIZZA.庐 Papa Johns believes that using high-quality ingredients leads to superior quality pizzas. Its original dough is made of only six ingredients and is fresh, never frozen. Papa Johns tops its pizzas with real cheese made from mozzarella, pizza sauce made with vine-ripened tomatoes that go from vine to can in the same day and meat free of fillers. It was the first national pizza delivery chain to announce the removal of artificial flavors and synthetic colors from its entire food menu. Papa Johns is co-headquartered in Atlanta, Ga. and Louisville, Ky. and is the world鈥檚 third-largest pizza delivery company with approximately 6,000 restaurants in approximately 50 countries and territories. For more information about the Company or to order pizza online, visit or download the Papa Johns mobile app for iOS or Android.

Forward-Looking Statements

Certain matters discussed in this press release and other Company communications that are not statements of historical fact constitute forward-looking statements within the meaning of the federal securities laws. Generally, the use of words such as 鈥渆xpect,鈥� 鈥渋ntend,鈥� 鈥渆stimate,鈥� 鈥渂elieve,鈥� 鈥渁nticipate,鈥� 鈥渨ill,鈥� 鈥渇orecast,鈥� 鈥渙utlook鈥�, 鈥減lan,鈥� 鈥減roject,鈥� or similar words identify forward-looking statements that we intend to be included within the safe harbor protections provided by the federal securities laws. Such forward-looking statements include or may relate to projections or guidance concerning business performance, revenue, earnings, cash flow, earnings per share, share repurchases, depreciation and amortization, interest expenses, tax rates, system-wide sales, adjusted EBITDA, the current economic environment, industry trends, consumer behavior and preferences, commodity and labor costs, currency fluctuations, profit margins, supply chain operating margin, net unit growth, unit level performance, capital expenditures, restaurant and franchise development, restaurant acquisitions, restaurant closures, labor shortages, labor cost increases, changes in management, inflation, royalty relief, franchisee support and incentives, the effectiveness of our menu innovations and other business initiatives, investments in product, digital and technology innovation and investments, marketing efforts and investments, liquidity, compliance with debt covenants, impairments, strategic decisions and actions, changes to our national marketing fund, changes to our commissary model, dividends, effective tax rates, regulatory changes and impacts, impacts of tariffs, insurance recoveries for damages related to natural disasters, repositioning of the UK market, International restructuring plans, including timing of completion, expected benefits and costs, International consumer demand, adoption of new accounting standards, and other financial and operational measures. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements.

Our forward-looking statements are based on our assumptions which are based on currently available information. Actual outcomes and results may differ materially from those matters expressed or implied in our forward-looking statements as a result of various factors, including but not limited to risks related to: deteriorating economic conditions in U.S. and international markets; labor shortages at Company and/or franchised restaurants and our quality control centers; increases in labor costs, changes in commodity costs, supply chain incentive-based rebates, or sustained higher other operating costs, including as a result of supply chain disruption, inflation, increased tariffs, trade barriers, immigration policies, or climate change; the potential for delayed new restaurant openings, both domestically and internationally, or lower net unit development due to changing circumstances outside of our control; the increased risk of phishing, ransomware and other cyber-attacks; risks and disruptions to the U.S. and global economy and our business related to geopolitical conflicts including conflicts in Ukraine and the Middle East and risks related to a possible economic recession or downturn that could reduce consumer spending or demand.

These and other risks, uncertainties and assumptions that are involved in our forward-looking statements are discussed in detail in 鈥淧art I. Item 1A. 鈥� Risk Factors鈥� in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.

For more information about the Company, please visit .

Supplemental Information and Financial Statements

Definitions

鈥淐omparable sales鈥� represents sales for the same base of restaurants for the same fiscal periods. 鈥淐omparable sales growth (decline)鈥� represents the change in year-over-year comparable sales. 鈥淕lobal system-wide restaurant sales鈥� represents total restaurant sales for all Company-owned and franchised restaurants open during the comparable periods, and 鈥淕lobal system-wide restaurant sales growth (decline)鈥� represents the change in global system-wide restaurant sales year-over-year. Comparable sales, Comparable sales growth (decline), Global system-wide restaurant sales and Global system-wide sales growth (decline) exclude franchisees for which we suspended corporate support.

We believe Domestic Company-owned, North America franchised, and International Comparable sales growth (decline) and Global system-wide restaurant sales information is useful in analyzing our results since our franchisees pay royalties and marketing fund contributions that are based on a percentage of franchise sales. Comparable sales and Global system-wide restaurant sales results for restaurants operating outside of the United States are reported on a constant dollar basis, which excludes the impact of foreign currency translation. Franchise sales also generate commissary revenue in the United States and in certain international markets. Comparable sales growth (decline) and Global system-wide restaurant sales information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of Global system-wide restaurant sales growth, excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit growth without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in the Company鈥檚 revenues.

Financial Statement Updates

The Company has implemented several financial statement changes to evolve and modernize our financial statements and footnotes to increase transparency and better reflect management鈥檚 key performance metrics. Financial results for the three months ended June 30, 2024 have been updated to conform with the current presentation to classify revenues and expenses based on the nature of the underlying activities without regard to operating segment. Please refer to the Company鈥檚 Form 10-K for the year ended December 29, 2024 and Company鈥檚 Form 10-Q for the second quarter ended June 29, 2025 for further information on segments.

Additionally, during the year ended December 29, 2024, the Company updated its internal cost allocation methodology to better reflect current levels of time and effort spent managing our different segments. These updates resulted in a higher allocation of previously unallocated corporate expenses to primarily the North America franchising and International segments. This update in methodology does not impact total reported expenses, and was implemented prospectively beginning with the year ended December 29, 2024. The comparative information has been recast.

Non-GAAP Financial Measures

In addition to the results provided in accordance with U.S. GAAP, we provide certain non-GAAP measures, which present results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and include the following: adjusted EBITDA, adjusted net income attributable to common shareholders and adjusted diluted earnings per common share. We believe that our non-GAAP financial measures enable investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies. We believe that the disclosure of these non-GAAP measures is useful to investors as they reflect metrics that our management team and Board utilize to evaluate our operating performance, allocate resources and administer employee incentive plans. The most directly comparable U.S. GAAP measures to adjusted EBITDA, adjusted net income attributable to common shareholders and adjusted diluted earnings per common share are net income, net income attributable to common shareholders and diluted earnings per common share, respectively. These non-GAAP measures should not be construed as a substitute for or a better indicator of the Company鈥檚 performance than the Company鈥檚 U.S. GAAP results. The table below reconciles our GAAP financial results to our non-GAAP financial measures.

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Papa Johns Investor Relations

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Source: Papa John鈥檚 International, Inc.