Papa John's Cuts 2026 Adjusted EBITDA Outlook
Adjusted EBITDA was $38.1 million in the third quarter, and the company now sees about $175 million for the full year.
Papa John’s International (PZZA) cut its 2026 adjusted EBITDA outlook to approximately $175 million from a prior range of $180 million to $190 million after a third quarter in which global system-wide restaurant sales fell 5.6% and International comparable sales reversed to a decline.
The pizza delivery company reported total revenues of $454.8 million for the three months ended September 27, 2026, down 10.5% from a year earlier. Adjusted EBITDA was $38.1 million, a $9.7 million decrease from the year-ago quarter. Net income was $3.3 million, or $0.09 a share, compared with $4.5 million, or $0.13 a share, a year earlier. Adjusted diluted earnings were $0.16 a share.
Global system-wide restaurant sales were $1.15 billion, a steeper drop than the 4.8% decline in the second quarter and the 3% decline in the first quarter. North America system-wide sales decreased 8.8% to $802.3 million. International system-wide sales increased 2.8% to $343.7 million. Growth rates exclude foreign currency.
North America comparable sales declined 8.3%, matching the second-quarter rate after a 6.4% decline in the first quarter. Domestic Company-owned comparable sales were down 7.5% and North America franchised comparable sales were down 8.5%. International comparable sales decreased 1.8% after a 1.5% increase in the second quarter and a 3.6% increase in the first quarter.
The company said the revenue decrease was mostly attributable to a $37 million decline at Domestic Company-owned restaurants, including about $26 million of lower revenues related to 113 restaurants refranchised after the third quarter of 2025 and 7.5% 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. All Other business units increased $5 million, primarily from higher advertising funds revenue. International revenues remained flat.
The company opened 47 restaurants system-wide, including 11 in North America and 36 in International markets, and ended the quarter with 5,969 restaurants. Net restaurant growth was a decline of 9 units. Trailing four-quarter net restaurant growth was a decline of 25 units.
President and CEO Todd Penegor said Papa Johns is entering the next phase of its transformation with Unbox Better, a plan built around strengthening the brand and the franchise system. The company introduced a new marketing framework with increased local franchisee marketing investment to complement national initiatives, combined with product improvements and operational actions.
The company updated its 2026 annual guidance. Global system-wide restaurant sales are now expected down about 5%, from a prior outlook of down 2% to 4%. North America comparable sales are now expected down about 8%, from down 6% to 8%. International comparable sales are now expected flat to up 1%, from up 1% to 3%. North America gross openings remain 40 to 50 and International gross openings remain 180 to 220. Adjusted depreciation and amortization, interest expense, the GAAP effective tax rate, capital expenditures and diluted shares outstanding were unchanged.
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 said the year-over-year decrease primarily reflected the timing of compensation payments related to the prior year, payments related to the Enterprise Transformation Plan, the timing of cash payments for the National Marketing Fund, and lower net income, partially offset by a decrease in capital expenditures.
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