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Papa John's International Inc (NASDAQ:PZZA) was downgraded to 'Underperform' from 'Neutral' by Bank of America, with analysts citing the company's chief financial officer's departure, persistent competitive pressures and a less optimistic outlook for same-store sales growth (SSSG). The brokerage lowered its price objective to $34 from $42, in line with current levels, and reduced its earnings forecasts, writing that former CFO Ravi Thanawala's departure "suggests rapid SSSG turn unlikely.
Papa Johns follows through on plans to close 300 stores, targeting franchise-owned locations generating less than $600,000 in annual sales by 2027.
As underperforming franchise locations are phased out, the chain laid off 7 percent of it's corporate workforce.
More than three months after it announced plans to close hundreds of restaurant locations this year, Papa Johns International appears to have already made significant reductions to its national footprint.
Investment firm Irth Capital is working with Papa John's International's largest U.S. franchisee, who controls around 10% of the pizza chain's domestic restaurants, to take the company private, three sources told Reuters.
Papa John's International NASDAQ: PZZA executives said the pizza chain is continuing a broad transformation plan as it navigates softer North American demand, a promotional quick-service restaurant environment and a more cautious consumer.
Papa John's International, Inc. (PZZA) Q1 2026 Earnings Call Transcript
Although the revenue and EPS for Papa John's (PZZA) give a sense of how its business performed in the quarter ended March 2026, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.
Papa John's International said budget-conscious customers have traded down to smaller pizzas and passed on sides and desserts in the latest quarter, weighing on sales and profit.
Papa John's (PZZA) came out with quarterly earnings of $0.32 per share, missing the Zacks Consensus Estimate of $0.4 per share. This compares to earnings of $0.36 per share a year ago.