Papa John’s International (PZZA) Q1 2025 earnings summary

Executive summary

• Q1 2025 global system-wide restaurant sales rose 1% year-over-year to $1.22 billion, driven by international growth but offset by North America declines.

• Revenues increased 0.9% to $518.3 million, with higher commissary and advertising revenues offset by lower company-owned restaurant sales.

• Net income was $9.3 million, down from $14.9 million year-over-year; adjusted EBITDA was $49.6 million, down from $60.6 million.

• 47 new restaurants opened systemwide in Q1 2025, bringing the total to 6,019 units.

• International Transformation Plan and UK portfolio optimization are nearing completion, with refranchising largely finished.

Financial highlights

• Company-owned restaurant sales declined $17.4 million, mainly due to UK refranchising/closures and lower domestic sales.

• Franchise royalties and fees increased 1.9%, supported by North America unit growth and international comparable sales growth of 3.2%.

• Commissary revenues rose 5.3% on higher commodity prices and a 1% fixed margin increase.

• Advertising fund revenues increased 17.8% due to higher national marketing spend.

• Operating income was $24.0 million, down from $33.7 million year-over-year.

Outlook and guidance

• 2025 system-wide sales expected to grow 2%-5%, with North America and International comparable sales projected flat to up 2%.

• Adjusted EBITDA guidance for 2025 is $200-$220 million, down from $227 million in 2024, reflecting ongoing investments.

• Capital expenditures expected at $75-$85 million, G&A at $70-$75 million, and net interest expense at $40-$45 million.

• Restaurant development: 85–115 North America and 180–200 International gross openings expected.

• 2025 and 2026 are positioned as investment years to drive long-term sales and profitability growth.