Papa Johns’ North America same-store sales drop 2.7% as consumers pull back on spending

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Papa Johns is adjusting to a cautious consumer environment amid its ongoing brand turnaround plan. The Atlanta-based quick-service pizza chain reported flat same-store sales for the third quarter ended Sept. 28, with robust 7.1% international sales growth offsetting the 2.7% decline in North America sales.  

“We are navigating weaker consumer sentiment and a more promotional QSR marketplace, particularly in North America, resulting in mixed third-quarter performance,” Papa Johns CEO Todd Penegor said during Thursday’s earnings call. “The majority of North America sales pressure was driven by declines in product outside of our core pizza offering, including wings, bread, sides, Papadias, and Papa Bites.”

Penegor added that in this cautious consumer spending environment, customers tend to pivot their focus to “center of plate” items like large pizzas and save money by removing extras from their orders.

Papa Johns CFO Ravi Thanawala said that in order to appeal to this usually lower-income cohort, the company added a 50% off carryout promotion. 

“It takes a little bit of time to make sure the consumer is aware that that offer is there, and we'll continue to partner with our franchise community to make sure that these promotions work, not just for the consumer, but for our four-wall economic model,” he said. “The 50% off carryout deal is really a basket-starter, and we see that consumers build a more holistic basket once they get into that promotion.”

With the carryout deal, the company saw improved order trends but will continue offering the promotion to get the full effect.

“In this environment, price is a key component,” Penegor said. “We are managing the moment with a more forward leaning value proposition.”

As Papa Johns balances promotional value for cash-strapped customers with store-level profitability, the company has leaned on its success internationally, led by key markets in Europe, the Middle East, and Asia. The company has been investing in operational efficiencies and expanding in international markets like India. 

With economic challenges continuing for the brand, Papa Johns adjusted its 2025 financial outlook from flat to up 2% same-store sales for North America to down 2 to 2.5% for the region. The company expects systemwide sales to now be up a more modest 1-2% for the fiscal year. 

For the third quarter ended Sept. 28, Papa Johns reported flat revenue of $508 million. Net income was $4 million, or 13 cents per share, down from $42 million or $1.27 per share the same quarter last year.

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Papa Johns reported 45 net unit openings in the third quarter, for a total of 5,994 stores systemwide.

Contact Joanna at [email protected]

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