Core Viewpoint - Papa John's reported third-quarter earnings that fell short of analyst expectations, indicating potential challenges in its operational strategy and market performance [1] Financial Performance - The company's sales for the third quarter were $508 million, which was below the analyst forecast of $524 million [1] - Adjusted earnings per share were $0.32, also lower than the expected $0.41 [1] Strategic Focus - CEO Todd Penegor emphasized that the company is concentrating on executing its strategy to enhance value [1] - The company remains open to other options if they arise, suggesting a flexible approach to its strategic direction [1] Market Activity - Reports indicated that Apollo Global Management has withdrawn its privatization proposal for Papa John's, which may impact the company's future strategic decisions [1]

Restaurant Operations - As of September 28, 2025, Papa John's operates 5,994 restaurants, including 558 company-owned and 5,436 franchised locations across 51 countries[110]. - The company opened 45 new restaurants in Q3 2025, with 18 in North America and 27 in international markets[115]. Financial Performance - In Q3 2025, total revenues increased by $1.3 million, or 0.3%, to $508.2 million, while revenues for the nine months ended September 28, 2025, rose by $27.0 million, or 1.8%, to $1.56 billion compared to the prior year[125]. - Total comparable sales growth for the company was reported at (0.2)% for Q3 2025, with a total global system-wide restaurant sales growth of 1.8%[121]. - Company-owned restaurant sales decreased by $2.7 million, or 1.6%, for the three months ended September 28, 2025, and decreased by $25.7 million, or 4.7%, for the nine months ended September 28, 2025, compared to the prior year[126]. - Operating income decreased by $49.1 million for the three months ended September 28, 2025, compared to $65.2 million for the same period in 2024[150]. - Net income attributable to the company was $4.7 million for the three months ended September 28, 2025, a decrease of $37.1 million compared to the prior year[150]. - Diluted earnings per common share were $0.13 for the three months ended September 28, 2025, down from $1.27 in the prior year, representing a decrease of $1.14[155]. - Adjusted EBITDA for the three months ended September 28, 2025, was $47.8 million, compared to $49.9 million for the same period in 2024[158]. Sales and Royalties - Comparable sales for Domestic Company-owned restaurants declined by 3.1% in Q3 2025, while International restaurants saw an increase of 7.1% during the same period[121]. - Franchise royalties and fees increased by 2.7% to $47.1 million in Q3 2025 compared to the same period in 2024[124]. - Franchise royalties and fees increased by $1.2 million, or 2.7%, for the three months and by $3.9 million, or 2.8%, for the nine months ended September 28, 2025, driven by International franchisee growth of 7.1% and 4.7% in comparable sales[128]. - North America franchise restaurant sales decreased to $714.6 million, or 0.8%, for the three months ended September 28, 2025, but increased to $2.23 billion, or 1.1%, for the nine months[129]. - International franchise restaurant sales increased to $328.3 million, or 10.1%, for the three months and to $950.4 million, or 10.0%, for the nine months ended September 28, 2025, excluding foreign currency fluctuations[130]. Costs and Expenses - Total costs and expenses were approximately $492.0 million, or 96.8% of total revenues, for the three months ended September 28, 2025, compared to $441.6 million, or 87.1% of total revenues, in the prior year[134]. - General and administrative expenses increased to $56.5 million, or 11.1% of revenues, for the three months ended September 28, 2025, compared to $12.9 million, or 2.5% of revenues, in the prior year[140]. - Depreciation and amortization expenses were $24.9 million, or 4.9% of total revenues, for the three months ended September 28, 2025, reflecting an increase due to accelerated depreciation of legacy technology assets[141]. - Other revenues, primarily from online and mobile ordering, increased by $1.9 million, or 9.7%, for the three months ended September 28, 2025, driven by higher technology service revenues[132]. - Advertising funds revenue increased by $0.3 million, or 0.7%, for the three months ended September 28, 2025, supported by global system-wide restaurant sales growth of 1.8%[133]. - Advertising funds expenses were $41.5 million or 99.5% of advertising revenues for the three months ended September 28, 2025, compared to $41.4 million or 100.0% for the prior year[144]. Cash Flow and Debt - Total cash provided by operating activities increased to $106.2 million for the nine months ended September 28, 2025, compared to $55.9 million for the same period in 2024, reflecting a $50.3 million increase[165]. - Total cash used in investing activities was $37.6 million for the nine months ended September 28, 2025, compared to cash provided of $7.4 million for the same period in 2024, primarily due to $52.1 million in capital expenditures[166]. - Free cash flow for the nine months ended September 28, 2025, was $59.2 million, significantly up from $8.9 million for the same period in 2024[183]. - Outstanding debt as of September 28, 2025, was $736.7 million, consisting of $400.0 million in senior notes, $200.0 million in Term Loan borrowings, and $136.7 million under the PJI Revolving Facility[172]. - The Company paid cash dividends totaling $45.8 million ($1.38 per share) for the nine months ended September 28, 2025, compared to $45.4 million ($1.38 per share) for the same period in 2024[180]. - The Second Amended and Restated Credit Agreement provides for a senior secured term loan of $200.0 million and a revolving credit facility of $600.0 million[162]. Future Outlook and Challenges - The company expects to achieve at least $50 million in supply chain savings starting in 2026 through productivity initiatives in its North American supply chain[115]. - The company anticipates completing the rollout of a new omnichannel platform by the end of 2026, with an estimated additional depreciation expense of $17 million to $22 million during this period[114]. - The International Transformation Plan is expected to incur total pre-tax costs of approximately $35 million, with $34.3 million already recognized through Q3 2025[116]. - The company has experienced price increases in food items, labor, and energy costs due to inflationary pressures, impacting profitability directly and indirectly[185]. - The company is managing food costs, particularly cheese, through pricing agreements and forward purchase contracts[185]. - The company does not anticipate significant negative impacts from proposed tariffs, as a substantial portion of ingredients is sourced domestically[185]. - The company faces risks related to labor shortages and increased operating costs, which may affect restaurant openings both domestically and internationally[186]. - Forward-looking statements include projections on revenue, earnings, cash flow, and adjusted EBITDA, but actual outcomes may differ due to various risks and uncertainties[186]. - The company is focused on managing macroeconomic challenges and retaining key management amidst staffing shortages[186]. - Expense control measures are being deployed to offset higher costs when possible[185]. - The company is assessing the impact of tariffs on discretionary spending patterns and franchisee profitability[185]. - The company has outlined potential risks in its Annual Report on Form 10-K for the fiscal year ended December 29, 2024[187]. - The company undertakes no obligation to update forward-looking statements except as required by law[187].

Financial Performance - Total revenues for Q3 2025 were $508.2 million, a slight increase of $1.3 million or 0.3% compared to the prior year[7]. - Net income for Q3 2025 was $4.5 million, a decrease of $37.3 million compared to the prior year, primarily due to a pre-tax gain of $41.3 million from the sale of two QC Center properties in the previous year[9]. - Diluted earnings per share were $0.13, down from $1.27 in Q3 2024; adjusted diluted earnings per share were $0.32, compared to $0.43 last year[11]. - Adjusted net income attributable to common shareholders for the nine months ended September 28, 2025, was $35.952 million, compared to $56.086 million for the same period in 2024[33]. - Adjusted diluted earnings per common share for the nine months ended September 28, 2025, was $1.09, down from $1.71 in the prior year[33]. - Net income for the nine months ended September 28, 2025, was $23.487 million, down from $69.238 million in the prior year, reflecting a decrease of about 66.1%[45]. Sales and Revenue Growth - Global system-wide restaurant sales reached $1.21 billion, up 2% year-over-year, driven by higher International sales and 1% global net restaurant growth[9]. - North America comparable sales decreased by 3%, while International comparable sales increased by 7%[5]. - Total comparable sales growth for the third quarter was flat at -0.2%, with International restaurants showing a growth of 7.1%[12]. - For the nine months ended September 28, 2025, revenues from external customers totaled $637,168,000, an increase of 4.2% from $611,873,000 for the same period in 2024[49]. - Revenues from external customers for the three months ended September 28, 2025, were $209,403,000, a slight decrease of 0.5% compared to $210,389,000 for the same period in 2024[48]. Cost and Expenses - The company incurred $56.478 million in general and administrative expenses for the three months ended September 28, 2025, significantly higher than $12.883 million in the same period last year[41]. - General and administrative expenses for the nine months ended September 28, 2025, were $28,983,000, up from $28,258,000 in the same period last year, representing a 2.6% increase[49]. - Cost of sales for the three months ended September 28, 2025, was $234,448,000, compared to $237,293,000 for the same period in 2024, indicating a decrease of 1.2%[48]. - Advertising funds expense for the nine months ended September 28, 2025, was $14,479,000, compared to $9,219,000 for the same period in 2024, reflecting a significant increase[49]. Guidance and Projections - The Company updated its 2025 annual guidance, projecting system-wide sales growth of 1% to 2%, down from the previous outlook of 2% to 5%[17]. - North America comparable sales are now expected to decline by 2% to 2.5%, compared to the prior guidance of flat to up 2%[17]. - International comparable sales outlook improved to a growth of 5% to 6%, up from 2% to 4%[17]. - Adjusted EBITDA guidance decreased to $190 million to $200 million, down from $200 million to $220 million[17]. - Depreciation and amortization expenses are now projected to be between $80 million and $95 million, an increase from the previous estimate of $70 million to $75 million[17]. Operational Highlights - The company opened 45 new restaurants in Q3 2025, including 18 in North America and 27 in International markets[5]. - The Company plans to open 85 to 95 new locations in North America, unchanged from the previous guidance of 85 to 115[17]. - International gross openings remain unchanged at 180 to 200[17]. - The company reported a net cash provided by operating activities of $106.192 million for the nine months ended September 28, 2025, compared to $55.884 million in the same period last year, an increase of approximately 90.0%[45]. Balance Sheet and Assets - The total current assets increased to $270.842 million as of September 28, 2025, compared to $230.605 million at the end of December 2024, marking an increase of approximately 17.4%[39]. - Total liabilities rose to $1.307 billion as of September 28, 2025, compared to $1.302 billion at the end of December 2024, indicating a slight increase of about 0.4%[39].

Group 1: AMD and Amazon - AMD reported better than expected earnings and revenue, providing upbeat guidance [1] - Amazon disclosed the sale of all its 822,000 shares in AMD, leading to a decline in AMD's stock by approximately 5.5% [1] Group 2: Pinterest - Pinterest shares fell nearly 18% after reporting profits below expectations and offering weak guidance [1] Group 3: Rivian - Rivian reported a smaller than expected adjusted loss, with revenue exceeding estimates and gross profit at $24 million [2] - The market had anticipated a loss of over $38 million, resulting in a 3% increase in Rivian's shares [2] Group 4: Papa John's - Papa John's stock dropped 10% following a report that Apollo Global withdrew its offer to take the company private [2] - The stock experienced an additional decline of 1% in the morning following the report [2] Group 5: NASA Nomination - President Trump has renominated Jared Isaacman to run NASA after previously pulling his nomination [3] - Isaacman is known to be friends with Elon Musk, who expressed approval of the nomination on social media [3]

Core Insights - Apollo Global has withdrawn its proposal to take Papa John's private at $64 per share due to signs of weakening consumer spending and early strains in the quick-service restaurant sector [1][2] - Earlier in 2025, Apollo and Irth Capital Management had made a joint offer of just over $60 per share before Apollo submitted a solo offer in early October [2] - Papa John's is scheduled to report its third-quarter results on November 6, 2025 [2] Financial Performance - In Q2 2025, Papa John's reported sales of $529.2 million, reflecting a 4% increase from the same quarter last year [3] - However, net income fell nearly 23% year-on-year to $9.7 million, impacted by higher general and administrative expenses, management incentive compensation, and increased food and labor costs [3] Company Overview - Papa John's operates nearly 6,000 restaurants across about 50 countries and territories, co-headquartered in Atlanta, Georgia, and Louisville, Kentucky [4]

Core Viewpoint - Apollo Global Management has withdrawn its privatization proposal for Papa John's, which previously offered $64 per share, leading to a nearly 10% drop in the stock price of Papa John's [1] Group 1 - Apollo Global Management, a private equity firm, had proposed a buyout of Papa John's at a price of $64 per share [1] - Following the news of the withdrawal, Papa John's stock experienced a significant decline of nearly 10% in the overnight trading session [1]

Core Viewpoint - Apollo Global has withdrawn its offer to acquire pizza chain Papa John's at a price of $64 per share, indicating potential challenges in the deal and market conditions ahead [1] Company Summary - Apollo Global's decision to withdraw the offer suggests a reassessment of the investment opportunity in Papa John's, reflecting broader market uncertainties [1] - The withdrawal may impact Papa John's stock performance and investor sentiment, as the company was previously seen as a target for private equity acquisition [1] Industry Summary - The pizza industry, represented by companies like Papa John's, may face increased scrutiny and volatility as investors react to changing market dynamics and potential economic challenges [1] - The withdrawal of the acquisition offer could signal a cautious approach from private equity firms in the current economic climate, affecting future M&A activity within the food service sector [1]

Core Insights - Papa John's has launched its largest pizza ever, named The Grand Papa, measuring 18 inches [1] - The pizza is made from the original dough with six simple ingredients and features Italian-deli inspired flavors [1] - Key ingredients include a new savory deli-style pepperoni, a three-cheese blend, and the brand's signature Italian seasoning [1]

Core Insights - Two stocks in the consumer discretionary sector are showing signs of being overbought, which may concern momentum-focused investors [1] Company Summaries - **Papa John's International Inc (NASDAQ:PZZA)**: - Scheduled to release Q3 financial results on Nov. 6 - Stock gained approximately 15% over the past month, reaching a 52-week high of $60.75 - RSI Value is 72.9, indicating overbought conditions - Recent price action saw shares rise 4.5% to close at $55.31 - Momentum score is 80.04 with a value score of 23.22 [3][7] - **General Motors Co (NYSE:GM)**: - Reported better-than-expected Q3 financial results and raised FY25 adjusted EPS outlook - Quarterly sales reached $48.59 billion, a slight decrease of 0.3% year-over-year, exceeding expectations of $45.27 billion - Growth driven by Chevrolet becoming America's No. 2 electric-vehicle brand, with the Equinox EV as the best-selling non-Tesla model - Stock gained around 19% over the past five days, with a 52-week high of $69.70 - RSI Value is 81.2, also indicating overbought conditions - Price action saw shares increase by 4.2% to close at $69.66 [4][7]

Core Insights - Two stocks in the consumer discretionary sector are showing signs of being overbought, which may concern momentum-focused investors [1] Company Summaries - **Papa John's International Inc (NASDAQ:PZZA)**: - Scheduled to release Q3 financial results on Nov. 6 - Stock increased by approximately 15% over the past month, reaching a 52-week high of $60.75 - RSI Value is 72.9, indicating overbought conditions - Recent price action shows shares rose by 4.5% to close at $55.31 [3][7] - **General Motors Co (NYSE:GM)**: - Reported better-than-expected Q3 financial results and raised FY25 adjusted EPS outlook - Quarterly sales reached $48.59 billion, a slight decrease of 0.3% year-over-year, exceeding expectations of $45.27 billion - Chevrolet has become America's No. 2 electric-vehicle brand, with the Equinox EV as the best-selling non-Tesla model - Stock gained around 19% over the past five days, with a 52-week high of $69.70 - RSI Value is 81.2, also indicating overbought conditions - Recent price action shows shares gained 4.2% to close at $69.66 [4][7]