Papa Johns Q3 profits fall 90% to $4m despite sales rise
In the UK, company-owned restaurants recorded an increase of $0.8m (£0.6m) in revenues driven by improved performance at the country’s operations
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Papa Johns International has reported that net income has dropped sharply to $4m (£3.04m) in the third quarter to 28 September, down from $42m (£32m) a year earlier, despite seeing a 2% rise in group-wide restaurant sales to $1.21bn (£920m) for the period.
Total revenues for the three-month period to 28 September was broadly unchanged at $508m (£386m), while adjusted EBITDA slipped to $48m (£36m) from $50m (£38m).
In the UK, company-owned restaurants recorded an increase of $0.8m (£0.6m) in revenues driven by improved performance at the country’s operations. It was noted, however, that results for the period are not directly comparable with a year earlier due to UK restaurant closures and refranchising transactions in 2024.
According to the pizza chain, these results reflect weaker performance in North America where comparable sales were down 3%, partly offset by a 7% rise in international comparable sales. The group opened 45 new restaurants globally during the quarter, including 27 overseas and two in India.
Papa Johns attributed its lower profit largely to a one-off $41m (£31m) gain in the prior-year quarter from the sale of two quality control centres, as well as higher marketing and technology costs this year.
However, the company revealed it has identified at least $25m (£19m) in general and administrative savings through an ongoing cost review, in addition to $50m (£38m) of supply chain savings previously announced.
The group also plans to accelerate its refranchising programme over the next two years and continue investing in technology to strengthen its customer experience.
Todd Penegor, president and chief executive of Papa Johns, said: “We are sharpening our value proposition and rebuilding our innovation pipeline to add new sales layers to our business. This relentless flow of innovation will allow us to better respond to consumer needs, leveraging our competitive advantages of quality, craftsmanship and freshness at an accessible price.”
