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- **North America Challenges**: Q3 comps down 2.7% due to sides decline, offset by flat core pizza sales.\n- **International Strength**: 7.1% comp growth driven by U.K. and China, with 2025 outlook raised to 5-6%.\n- **Cost Transformation**: $50M+ supply chain savings by 2028, $25M G&A savings over 2026-2027.\n- **Refranchising Acceleration**: Targeting mid-single-digit ownership in North America by 2026.\n- **Innovation Pipeline**: Papa Dippa and Grand Papa launched, with 2026 focused on affordable sides and add-ons.\n- **Balance Sheet Health**: $502M liquidity, free cash flow $59M, supporting strategic initiatives.

**【CEO Summary Section】**
- **North America Sales Decline**: Q3 comparable sales decreased 2.7%, driven by lower add-ons and sides sales, while core pizza sales remained flat despite a 3% increase in pizzas sold.\n- **International Growth**: International comparable sales rose 7.1%, with strong performance in Europe, Middle East, and Asia Pacific.\n- **Cost Savings Initiatives**: Targeting $50 million in supply chain savings by 2028, including $20 million in 2026, and $25 million in non-customer facing G&A savings over 2026-2027.\n- **Refranchising Acceleration**: Reducing company-owned restaurants to mid-single digits of North America system by 2026, with 85 restaurants set to transfer in Q4.\n- **Innovation Pipeline**: Launching Papa Dippa and Grand Papa in Q3, with 2026 focused on reimagined sides and affordable add-ons.\n- **Promotional Strategy**: Pulsing BOGO offers and 50% off carryout to drive transactions, with early signs of success in Q3.\n
**【CFO Financial Commentary】**\n- **Q3 Financials**: Global system-wide sales $1.21B (flat vs. prior year), North America revenue down $6M, international up $6M.\n- **EBITDA**: Consolidated adjusted EBITDA $48M, impacted by $4M incremental marketing and $2M higher incentive costs.\n- **Margins**: North America commissary EBITDA margin improved 100bps to 3.4%, driven by 3% pizza volume growth.\n- **Balance Sheet**: $502M liquidity, gross leverage 3.4x, within target range.\n- **2025 Outlook**: Global sales +1-2%, North America comps -2-2.5%, international comps raised to 5-6%.\n- **Cash Flow**: Free cash flow $59M (vs. $9M prior year), driven by working capital and tax timing.\n
**【Q&A Key Highlights】**\n- **Refranchising Execution**: Pipeline of buyers at attractive multiples, with 85 restaurants set to close in Q4.\n- **G&A Savings**: $25M+ savings to begin in 2026, none embedded in 2025 guidance.\n- **International Momentum**: U.K. and China leading with franchisee focus on priority markets, 4Q comps tracking above expectations.\n- **Loyalty Program Growth**: 40M total loyalty accounts (+1M Q3), with higher redemption rates and order frequency.\n- **Value Proposition**: 50% off carryout offer showing early traction, balancing premium positioning with affordability.\n- **Marketing Efficiency**: $17M incremental spend year-to-date, with focus on testing and learning for 2026 strategy.

Papa John's International, Inc. (PZZA) Q3 2025 Earnings Call Transcript

- **North America Revival**: 1% Q2 comp growth, 6% pizza per order increase, driven by Cheddar Crust and loyalty program expansion.
- **Global Expansion**: 4% international comp growth, Croissant Pizza launch in Dubai, U.K. refranchising success.
- **Cost Efficiency**: $50M+ supply chain savings by 2028, 1%+ margin improvement target.
- **Tech Innovation**: Google Cloud partnership testing AI-driven app; 200+bps app conversion gains.
- **Franchise Growth**: 85 JV sale frees capital; 2025 international comp guidance raised to 2-4%.


**【CEO Summary Section】**
- **North America Recovery**: Q2 comparable sales grew 1%, driven by transaction growth and menu innovations like Cheddar Crust and Shaq-a-Roni. Pizzas per order increased 6%, reflecting value and innovation.
- **International Momentum**: 4% comparable sales growth, with Croissant Pizza launching in Dubai and plans for global expansion. U.K. refranchising and aggregator growth boosted international performance.
- **Strategic Priorities**: 
  - **Product Innovation**: Ongoing oven calibration improves consistency; Garlic 5-Cheese and shareable pizzas launching in Q3.
  - **Marketing Success**: Meet the Makers campaign emphasizes 6 simple ingredients, boosting brand consideration and social engagement.
  - **Technology Integration**: Google Cloud partnership beta-testing omnichannel app; AI-driven personalization and voice ordering in development.
  - **Loyalty Program**: Papa Rewards added 2.7M members, with faster redemption and higher repeat purchase rates.
  - **Supply Chain Optimization**: $50M cost savings by 2028, 40% realized in 2026, through renegotiated contracts and logistics efficiency.

**【CFO Financial Commentary】**
- **Q2 Financials**: Total revenue $529M (+4%), commissary up $20M. Adjusted EBITDA $53M, impacted by $9M marketing/loyalty investments.
- **Margins**: Domestic Co-Owned EBITDA margin down 220bps due to labor, food costs; Commissary margin improved 130bps to 7.3%.
- **Guidance Updates**: 
  - **North America**: Flat to +2% comp growth; Q3 soft start expected to accelerate with new products.
  - **International**: Raised 2025 guidance to 2-4% comp growth, driven by U.K. and Middle East expansion.
  - **Cost Savings**: $50M+ from supply chain by 2028, supporting 1%+ margin improvement.
  - **Franchise Deal**: JV sale of 85 U.S. restaurants expected Q4, reducing 2025 revenue by $15M but freeing capital for growth.

**【Q&A Highlights】**
- **Marketing Effectiveness**: $25M+ annual marketing spend focused on local co-ops and CRM; early Q3 tests show app conversion gains.
- **Supply Chain Changes**: 40% of $50M savings realized in 2026; no quality compromise in cost-cutting.
- **App Performance**: 200+bps conversion improvement over 4Q; beta-testing voice AI and personalized offers.
- **International Growth**: U.K. comps accelerating in July; Middle East Croissant Pizza expansion planned. China strategic closures to strengthen long-term health.
- **Franchise Strategy**: Refranchising focus on high-growth markets; 85 JV sale includes development commitments.


Papa John's International, Inc. (PZZA) Q2 2025 Earnings Call Transcript

- **Strategic Momentum**: Sequential sales growth (+290bps YoY) and 4% pizza order increase, fueled by barbell strategy ($6.99 Papa Pairings & premium offerings).
- **Marketing Investment**: $25M+ 2025 ad spend to reinforce value perception and drive transactions; Q1 2025 saw +1M loyalty members.
- **Franchisee Growth**: Refranchising 539 US restaurants to accelerate market share; franchisee interest in high-margin markets.
- **Financial Resilience**: $90M free cash flow; 2025 EBITDA guidance $200-220M amid strategic investments.
- **Operational Focus**: Google Cloud partnership to enhance delivery efficiency and customer experience; oven calibration to unlock new product innovation.

**【CEO Opening Remarks】**
- **Strategic Priorities**: Focused on core product innovation (e.g., Epic Stuffed Crust Pizza), amplified marketing (Meet the Makers campaign), technology investments (Google Cloud partnership), customer experience enhancement, and franchisee collaboration.
- **Performance Highlights**: Sequential sales improvement (+290bps vs. Q4 2024), transaction share gains, and 4% increase in pizzas ordered YoY. Q1 2025 saw 1 million new loyalty members, total reaching 37 million.
- **Future Initiatives**: Accelerated product innovation (new pizza formats, crust flavors) and refranchising of 539 company-owned restaurants to improve market share and restaurant economics.

**【CFO Financial Overview】**
- **Revenue**: $518 million (+1% YoY), driven by commissary (+$11M) and advertising fund (+$7M) growth.
- **Profitability**: Adjusted EBITDA $50 million (-18% YoY) due to higher marketing ($7M) and G&A expenses. Commissary EBITDA margin improved to 7.3% (+50bps YoY).
- **Cash Flow**: Free cash flow $90 million (+ vs. prior year), supported by refinanced $200M term loan and $494M liquidity.
- **2025 Outlook**: System-wide sales growth 2-5%, North America comps flat to +2%, and adjusted EBITDA $200-220 million.

**【Q&A Key Takeaways】**
- **Demand Trends**: Sequential sales improvement (+1% in Q2 comps vs. Q1), driven by value perception and new menu innovation.
- **Marketing Impact**: $7M incremental Q1 ad spend; plans for $25M total 2025 investment to reinforce brand and transaction growth.
- **Franchisee Collaboration**: Refranchising 105 UK restaurants; franchisee interest in acquiring high-margin US markets.
- **International Growth**: UK comps +1%, Latin America and Middle East markets growing mid-single to double digits.
- **Supply Chain Optimization**: Multi-year initiative to reduce cost-to-serve, with savings expected in 2026.
- **Delivery Experience**: Partnering with Google to improve routing, delivery times, and customer tracking accuracy.


Papa John's International (PZZA)-8 May 25-2025 Q1 Earnings call transcript

- **Sales Momentum**: Q4 2024 North America comps -4% (flat ex-53rd week), with 130bps sequential improvement in Q1 2025. 2025 system-wide sales target +2-5%.
- **Marketing Investment**: $25M incremental spend in 2025, focusing on CRM, loyalty, and local/national mix testing. Q4 2024 saw $4M incremental marketing spend.
- **Loyalty Program Success**: Papa Rewards redemption rate jumped to 50% (from 21%), with 50% of orders redeeming Papa Dough. 2025 aims to innovate for emotional engagement.
- **Development Ambition**: 2025 targets 85-115 North America openings and 180-200 International openings, with refranchising efforts underway.
- **Financial Outlook**: 2025 adjusted EBITDA $200-220M, with Q1 facing loyalty program transition headwinds. Free cash flow expected to improve as investments pay off.
- **International Growth**: Middle East comps +20%, U.K. +2%, and Latin America markets showing strong momentum. Focus on nine key markets with no saturation risks.


**【CEO Strategic Priorities】**
- **Product Innovation**: Launched initiatives to enhance value perception, including $11.99 XL New York-Style Pizza and heart-shaped Valentine's Day pizza, driving record sales days. Q4 featured $13.99 Epic Stuffed Crust and $6.99 Papa Pairings. 2025 plans include testing new products and media mixes in specific markets.
- **Marketing Investment**: Committed to $25M incremental marketing spend in 2025, focusing on CRM, loyalty program, and balanced national/local campaigns. Q4 saw $4M incremental marketing spend, with focus on carryout and aggregator channels.
- **Customer Experience**: Enhanced loyalty program (Papa Rewards) with faster Papa Dough redemption, increasing redemption rate from 21% to 50%. 2025 aims to innovate loyalty program for emotional connection and transaction frequency.
- **Development**: Opened 300+ new restaurants globally in 2024, including 112 in North America. 2025 targets 85-115 North America openings and 180-200 International openings. Refranchising efforts underway, with 15 Wisconsin restaurants transferred to franchisees.
- **Supply Chain Optimization**: 30% of franchisees earned rebate incentives in 2024 under fixed margin structure. 2025 review of North America commissary network to improve restaurant economics.

**【CFO Financial Highlights】**
- **Q4 2024 Results**: Global system-wide sales $1.23B (-8% YoY, flat ex-53rd week). North America comp sales -4% (-2% ex-53rd week). Adjusted operating income $37M (-22% YoY). Free cash flow $34M (down vs 2023).
- **2025 Outlook**: System-wide sales +2-5%, North America comps flat to +2%. Adjusted EBITDA $200-220M (vs $227M in 2024). Q1 2025 challenges include loyalty program transition, with first eight weeks showing -3% North America comps (130bps improvement vs Q4 2024).
- **Cash Flow & Balance Sheet**: $291M liquidity (cash + revolver). Gross leverage 3.2x. 2025 capex $75-85M, D&A $70-75M, tax rate 28-32%.

**【Q&A Key Takeaways】**
- **International Growth**: Middle East comps +20%, U.K. +2%, Chile/Peru low double-digit growth. Focus on nine key markets with 50% of development allocated there. No saturation concerns.
- **Investment Allocation**: $25M marketing, $4M franchisee conference, $14M incentive plan reset. 2025 G&A includes $4-7M Q2 marketing spend and $2M H2 incentive costs.
- **Franchisee Profitability**: Balancing value perception with margin management via strategic pricing, innovation pipeline, and loyalty program targeting. 2025 focus on transaction growth, then check expansion.
- **Delivery Channel**: Organic delivery trends improving (+200bps Q4 vs Q3). Carryout and aggregator channels driving growth, with carryout orders up low-single digits YoY.


Papa John's International, Inc. (PZZA) Q4 2024 Earnings Call Transcript

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