Papa John’s(PZZA) - 2025 Q3 - Quarterly Results

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].