Papa John’s at 25th Annual Consumer Growth Conference: Strategic Shifts Highlighted

Published 10/06/2025, 16:54
Papa John’s at 25th Annual Consumer Growth Conference: Strategic Shifts Highlighted

On Tuesday, 10 June 2025, Papa John’s International Inc. (NASDAQ:PZZA) presented at the 25th Annual Consumer Growth and E-Commerce Conference. The company outlined strategic initiatives aimed at boosting market share and improving operational efficiencies, while acknowledging the challenges of maintaining growth momentum. The leadership team, led by CEO Todd Penegor, expressed optimism about the future, emphasizing both recent successes and areas for further development.

Key Takeaways

  • Papa John’s is refocusing on its core brand message of "better ingredients, better pizza" to improve market share.
  • The company plans to invest $25 million in marketing in 2025 to drive growth.
  • A strategic partnership with Google Cloud aims to enhance customer personalization through AI.
  • Papa John’s expects 2% global unit growth and flat to 2% same-store sales growth in North America for 2025.
  • The company is optimizing its supply chain to realize cost savings by 2026.

Financial Results

  • EBITDA Guidance: For 2025, Papa John’s projects an EBITDA between $200 million and $220 million, inclusive of a $25 million marketing investment.
  • Same Store Sales: The company anticipates North American same-store sales to remain flat or grow by up to 2% in 2025, with flat comps expected by mid-year.
  • Unit Growth: A global unit growth of approximately 2% is projected for 2025.
  • Transaction Growth: Sales transactions have shown positive growth, exceeding 1% in recent periods.

Operational Updates

  • Brand Messaging: Efforts are underway to reinforce the "better ingredients, better pizza" message.
  • Loyalty Program: The loyalty program has grown to 37 million members, with increased engagement as nearly half of customers now purchase with an offer.
  • Third-Party Delivery: Third-party delivery sales make up about 17% of total sales, with strategies in place to protect market share.
  • Supply Chain: Optimization efforts are expected to yield productivity and cost savings, with financial benefits starting in 2026.
  • Restaurant Experience: Enhancements are being made to improve the overall customer journey and satisfaction.

Future Outlook

  • Comps Acceleration: The company anticipates continued acceleration in comparable store sales throughout 2025.
  • Innovation Pipeline: New product launches are planned for late 2025 and early 2026 as part of a revitalized innovation strategy.
  • International Growth: A focused approach to international expansion is being pursued.
  • Refranchising: Selective refranchising is expected to support growth and improve the financial model.
  • Normalized Unit Growth: Aiming for high single-digit growth in system-wide sales.

Q&A Highlights

  • Value Perception: Significant improvements have been noted in customer perceptions of value.
  • Data Utilization: AI and data analytics are being leveraged to enhance customer experiences and drive transactions.
  • Marketing Strategy: The media mix is evolving to include more digital and social channels alongside traditional advertising.
  • Competitive Landscape: The company sees opportunities for growth in the underpenetrated pizza category within aggregator platforms.

In conclusion, Papa John’s leadership remains confident in the company’s strategic direction and growth prospects. For a deeper dive into the conference call, readers are encouraged to refer to the full transcript.

Full transcript - 25th Annual Consumer Growth and E-Commerce Conference:

Brian Bittner, Restaurant Analyst, Oppenheimer: Good morning, everybody. I’m Brian Bittner, the restaurant analyst here at Oppenheimer. And thank you again for attending our twenty fifth annual consumer conference. We’re incredibly excited to welcome Papa John’s International back to our conference, and we’re thrilled to be joined by Papa John’s president and CEO, Todd Penegor. He joined the company in August of twenty twenty four after a solid run as CEO at Wendy’s.

And we’re also joined by Ravi Thanawala, who’s been CFO since July of twenty twenty three, and he’s also executive VP of international. And we are also joined by Heather Hollander, senior VP strategy and investor relations. This refreshed management team is making real solid progress against its new strategic plan to drive improving traffic and enable more profitable growth. And we’ll dive into this and other important topics for the story, and we thank you all for spending time with us today. Thank you so much.

Todd Penegor, President and CEO, Papa John’s: Our pleasure, Brian. And good morning, everyone. And thanks for joining this morning. It’s hard to believe that it’s been ten months since I’ve been here, so excited to be on board and looking forward to the chat today.

Brian Bittner, Restaurant Analyst, Oppenheimer: And, you know, Todd, I’d like to start there. Start by zooming out starting big picture. You’ve been at the company for less than a year, ten months, but you’ve already made some major strategic shifts to try to improve traffic to elevate the market share and enhance the restaurant economic model. Can you just start about the progress you believe you’ve made over these last ten yet ten months? And more importantly, where do you see the largest unlocks as you look forward into 2026 and beyond?

Todd Penegor, President and CEO, Papa John’s: Yeah. No. Thanks for that, Brian. And it it really started with the team. You know, there was a lot of talent that I was able to inherit when I came on board.

Ravi clearly had a lot of potential and picked up the international business along the way to continue to develop himself. Joe Seabee, who had on board, picked up on global remit around development. And then we brought in some new talent, Bringing in Kevin Vasconi on the technology front has been great. He’s really built out a really strong team around him. Jenna Bromberg on the marketing and culinary front, she’s built a strong team around her.

Those things were important because that was step one, make sure we had a really good team that was really consumer focused, insight driven on everything that we did. We were in a position where the brand had a strong foundation. We had a lot of loyal customers. We weren’t just seeing the frequency that we needed to have in our brand. And we knew we had to do a few things differently.

We were coming out of, you know, a campaign around Better Get You Some, which really didn’t pay off, you know, why we were better ingredients, better pizza. So we had to come back to the core of really telling our story of why we’re better, unique, and different than the competition. And you’re starting to see that in our Meet the Makers campaign. talking about the pizza craftsmanship in our restaurants, and you’re going to see that evolve and talk about our unique differences around simple ingredients and, kind of the farm to fork and made from scratch nature of our food, which is so on trend for today’s consumer. We knew we had to get back into position on value, and value isn’t just the price point, it’s worth what you pay.

So and foremost, having an always on message around $6.99 Papa pairings, having a good compelling message on our high end of the barbell at a good price point, those things were important. But we also knew that we had to really fall in love with being great operators all over again. And we put some things in play. We put some additional coaches into play. We spent more time in the restaurants, coaching, supporting our franchise community, and holding them accountable to really raise the bar and deliver on great experiences every single time.

And, you know, the combination of, you know, having that quality message, getting back position on value and then paying it off at the restaurant level and we’re still in the early innings on all of those things has made a big impact on our business. But we made a couple of other moves. Really helping on the value perception front was evolving our loyalty program, really moving it to getting $2 off of $15 versus $10 off of $75 help drive frequency, help drive engagement. And we’re really proud of the way our program works. It’s not bouncing you back to a product.

It’s giving you cold hard cash that you make a purchase, you’re going to be getting a discount off your next purchase. And we’re seeing some nice frequency and can talk about that as we go through this morning on that program. And we’re seeing our worth what you pay metric move nicely both from a value for the money as well as the quality aspect. So those things have been important moves that we’ve made along the way. And then importantly, we’ve been able to leverage all the great data that we have.

We have a really strong loyalty program. We’re up to 37,000,000 folks that are enrolled in the program. And we just weren’t leveraging the data to the extent that we should or could. And we’ve really evolved that, really worked the customer journey, worked to connect the consumer to change behavior and really having a retail mindset with all the data and the information we have and watching the partnership with folks with some retail backgrounds with Ravi and his background and Jenna and her background to be able to check and adjust really quickly in our business to make sure we’re connecting our programs to our customer and bending trends. Those things have all really driven some positive momentum in our business.

And our strategy seems to be working. We’ve got some work to still do. We’re still rebuilding and building out our innovation pipeline. You’ll see a lot more innovation come on to the calendar in the back half of this year and into early next year. We’ve tested and proven out some of the things that we need to bring to life.

We’ve stayed away from that for the last ten months. We’ve been really focused on the core. But it has been paying off as we’re selling a lot more pies. We talked about pie sales being up 4% in the first quarter. We know we’ve got some sides and handhelds that we’re going to have to bring some to over time to make sure that that isn’t a leaky bucket.

But we are focused on improving the overall satisfaction of the whole experience, not just what we deliver and what we make, but all the way through the whole journey and what we’re doing through the app and making it a lot easier to get through with less clicks and more seamless. So lots of little levers that we’re pulling, but they all add up to make a difference for the overall customer experience. And it’s starting to bend some trends in a market that’s very competitive, both from a competitor perspective in the pizza category as well as, you know, a tougher consumer landscape. But we know we can deliver good value for the money and keep building on the trends that we’re seeing.

Brian Bittner, Restaurant Analyst, Oppenheimer: And building on that, you are bending some trends. We are starting to see some some measurable success. Sales and traffic trends have showed pretty consistent sequential improvements into the first quarter and and year to date. And a big piece of this is improving the value perception, and and that’s kind of what you started with on this journey. And what are the largest indicators that your strategy to improve the value perception is resonating with the customer.

And and from a market share perspective, you know, just based on your traffic, it looks like you’re starting to retake some share. Where do you think that’s coming from?

Todd Penegor, President and CEO, Papa John’s: Yeah. So I mean, and foremost, we do track our brand health and we look at it on a regular basis. And worth what you pay and value for the money are important metrics that we’ve seen significant movement in over the course of the last nine, ten months. So we really believe that the levers we’re pulling are making And we’re hearing it in the verbatims back from the consumer. We’ve always had $6.99 Papa pairings on the menu.

We just didn’t talk about it as regular and frequently as we have. And we haven’t really played a strong barbell strategy consistently, and we’re doing that now on both the low end and the high end. We know our opportunity is to bring some new news into the high end, and you’ll start to see that. You’re seeing it right now with Cheddar Crust Pizza, and you’ll see a steady cadence of innovation in the back half of the year. All of those things have really allowed us to connect to the consumer.

But it is important, you got to pay it off at the end of the day. And we talked not that long ago on our earnings call that we did a lot of mystery shops. We knew what we did well. We knew what we needed to do better. And we purposely have spent more time in our restaurants with our franchisees and with our teams to coach and make sure we continue to raise the bar to deliver on a great experience every single time.

And that’s a journey that will never end. But those things are making a difference. And us just talking about, you know, the craftsmanship and what we do in the restaurants and, you know, the visuals that we’re now providing in the maker’s campaign and the evolution that we’re going to talk about and six simple ingredients and fresh, never frozen, original dough. Those things will really continue to resonate with the consumer to make sure they do feel everything’s worth what they’ve paid. So we’ve continued to look at the full ecosystem, price, quality, messaging.

And we’ll continue to tell our story, not just on a linear front, but through our digital and social voice. But anything else to add, Robbie?

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: Yeah. Todd, I think you covered a lot of it. This focus on six simple ingredients, the way we make our tomato sauce from tomato to sauce in twenty four hours, we think that’s really powerful for the consumer today. So we think about where where the market share opportunity is. We we think that this positioning speaks to a lot of consumers across the world, and we think that it’s an opportunity to invite more consumers into the brand.

As we talked about on our earnings call, we saw sequential improvement in sales and transactions in Q1. We expected that to continue into Q2. We feel like we’re on track with that. And as we talked about on the last earnings call, we we expect to see comps continue to accelerate as we progress through the year. We’re bringing a a true data mindset to how we check and adjust in the business every single day.

So this notion of being able to look and understand what’s happening in our value perception by campaign, is possible. It’s it’s it’s something we we study deeply. We’re seeing that consumer behavior across all

Todd Penegor, President and CEO, Papa John’s: of

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: our frequency bands are are improving. So we’re pushing and pulling levers at at a fairly micro level, but it’s all grounded in this notion of we we are a quality player, and we have a a a great positioning when it comes to six simple ingredients and a truly pizza that that pays off in quality.

Todd Penegor, President and CEO, Papa John’s: I’ll tell you what, Brian. The one the one thing that we had to refocus the whole system on is we had to bring in more customers more often. So we purposely went after making sure we were driving transactions and then we’ll continue to work to figure out how we drive check-in the economic model. And Robbie and the team worked that closely day in and day out with the marketing and the operations team to continue to do that. But we talked about it.

Every incremental transaction that we bring in is almost $17 variable profit. So it starts there because we got to make sure we’re in the consideration set. We drive some frequency. And the loyalty program has clearly been a frequency driver for us. It’s been great where we used to have only two in 10 folks actually buy with an offer through the loyalty program and now we’re almost five in 10.

And the opportunity is to now recruit some more new customers in as we start to get frequency up with our core. And that’s why you’ll start to see some more news coming our way with Cheddar Crest Pizza being the one that’s out there today. And those things make an impact to continue to drive our sequential improvement in our business. And as Ravi said, all of that’s on track with what we talked about coming out of our first quarter earnings call.

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: And this is how we bring the sales layers together, Papa pairings, high repeat purchase consumers are now trained that we have that offer available. And now we’re layering on new sales layer with with great innovation like cheddar crust.

Brian Bittner, Restaurant Analyst, Oppenheimer: In in your last business update, you you you you just touched on it, but you you did reiterate your guidance for same store sales for 2025 flat to plus two in North America, and you talked about how that does incorporate accelerating trends, getting to flat comps by mid year with positive traffic and positive accelerating comps, I’d say, in the year. And you’re it sounds to me like you’re speaking to confidence in that trend. What what forward indicators are you seeing in your business that’s driving that confidence in this positive curve?

Todd Penegor, President and CEO, Papa John’s: Yes. I think as we talked about on the earnings call coming out of period four where we actually saw transactions continue to grow nicely north of 1%. And at the time, our same restaurant sales comps growing still down, but down less than 1%. We talked about continuing to build momentum from that point through the quarter, and we’re on track with all of that. In a tough consumer and competitive landscape, we continue to deliver on that.

And I think it’s all the levers that we’re pulling, bringing some news in with innovation, continue to refine our one to one marketing communications through CRM, continue to recruit new folks into our loyalty program and continuing to engage with the folks in the loyalty program. All of those things have continued to build our momentum and telling our story around who we are and really getting back to our core of better ingredients, better pizza and really paying off why we’re better in a lot of respects than a lot of the other choices out there. Those all have built on our trends and we’re on track with all of that. And importantly, as you look to the back half of the year, we just still have a lot of growth levers to pull in front of us. We can continue to refine in our CRM messaging.

We test and learned a lot. And we know what’s connecting with the consumer and we know what’s not. We spent a lot of time rebuilding our innovation pipeline. And it was better than we would have liked at the end of last year, but that’s replenished and we have a good cadence of news that will come for the back half of this year. And we’re going to continue to lean in on really making sure that we’re partnering with the franchise community to help our teams continue to make the best pizzas in the business.

And we talk about being the best pizza makers in the business, words have to turn into delivering on that promise. And we’re seeing our overall satisfaction metrics improve at the restaurant level. All those things start to give us confidence in the back half that will continue to accelerate. And at least if not all, our comps get a little bit easier. But anything else you’d add, Ravi?

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: The metrics I obsess every single day on this topic is what’s happening in our consumer accounts and are we seeing growing confidence that our accounts are getting stronger? Is the distance to the transaction getting shorter? And that helps us to predict that another transaction is coming. And then is, like, are we actually seeing the retention rate of our consumer improve? And we we do see that the the recipe of strong consumer vile in a digital business gives us the levers to go push and pull, to continue to drive comps.

And then to Todd’s point, we we we’ve spent time replenishing the innovation calendar for the business, and we’ll continue to drive some excitement with the consumer as we look into the future.

Brian Bittner, Restaurant Analyst, Oppenheimer: Excited to see all this innovation. You guys have always done a great job with innovation. As we think about the financial impacts of these strategy shifts, you have very defined EBITDA guidance this year, 200 to 220,000,000. Interestingly, this actually includes 25,000,000 of of incremental investments in marketing in your in your kind of amplifying marketing piece of your strategy. What are your early learnings on deploying this incremental advertising thus far?

And and how do you think about the sustainability of that investment, say in ’twenty six or ’twenty seven?

Todd Penegor, President and CEO, Papa John’s: Yeah, I’ll start and I’ll probably provide a little bit of color. I mean, we had a lot to invest to really tell our story. And you start to think about where we have historically been, and we’ve been a very linear driven, you know, ad message, which got us broad reach and appeal. But we continue to test and learn and evolve our media mix. What’s the appropriate level of of linear and how do we support it with social digital?

You know, how do we amp up and ramp up what our social voice needs to be? And you’re starting to hear our boy voice be a little more brazen and really talking about why we’re unique and and and different than the competitive set. You And that social and digital landscape, it can really complement what we’re doing in the linear spot. So we’ve learned a lot on that. And I think we brought our franchise system along in the journey that it is powerful and it does connect to the next generation of consumer and it can drive sales and frequency.

We’re also really trying to evolve and learn what’s the appropriate national and local mix of all of our overall advertising spend. That’s still a big opportunity for us into 2026 around how do we make sure we stand back up our co ops, how do we have the right level of local pressure, how do we work as a unit in those local markets and have the right balance that works in the economic model between national advertising and local advertising, and we’re testing and learning on that every single day. And we know some of that investment will carry forward into 2026 to really build a strong foundation. But it will continue to help us build momentum in this business to make sure we stay in the consideration set, we’re driving frequency, and we’re winning the hearts and minds of more new customers. So we’re feeling good that the strategy that’s in play, the investments that we’re making will pay off for the long run.

But any other thoughts on that, Ravi?

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: The the payoff for the long term is is really clear to us. We think that this is the time to be going out there and taking market share and taking market share from a transaction lens, high variable profitability model with every new transaction. There’s still capacity in our existing restaurants in order to add more orders and transactions that’s gonna strengthen the four wall economic model, and it’s gonna help us to take market share for the long term. And this is all underpinned against this notion of we deliver a quality product with a great loyalty program. So us investing right now to win consumers’ hearts and minds, we think it’s gonna be really impactful, especially as there there’s there’s a lot of dynamic elements to the consumer environment right now, and we feel well positioned right now that this is the time to go take share.

Brian Bittner, Restaurant Analyst, Oppenheimer: And and on loyalty, 37,000,000 members, which is a meaningful statistic for the size of your company. You talked about better leveraging data to drive the business going forward. You’ve now partnered with Google Cloud. You have an amazing tech executive in Kevin Buscone. What’s the biggest opportunity you see on the loyalty data side of the business to unlock for future growth?

Todd Penegor, President and CEO, Papa John’s: Yes. I think we still even though we got 37,000,000 folks in loyalty program, I think we can still continue to recruit more. It was nice that we added another million in the first quarter. But that loyalty program is clearly working. And to recruit more folks in will allow us to continue to drive frequency and connect to that consumer.

I think our opportunity is we’ve got such a rich minefield of data that we haven’t utilized to the full extent that we should. We’re starting to do that right now with the teams and the partners we have in place. We’re starting to see some very impactful CRM journeys and connections to bend trends. We can move quickly, which I love that the team is checking and adjusting. And we’ll continue to do that to make sure that we’re staying relevant in the consumer mindset to make sure that we’re getting one more purchase out of them on a more regular basis.

But we do think there’s a huge amount of opportunity. I mean Kevin’s recruited a class team. He’s brought some unbelievable talent in, and we’ve got some great partners. And Google Cloud, when you start to think about what they could do to help us leverage AI and mine all the data to anticipate customer needs, to have hyper personalized loyalty experiences, to really drive some predictive ordering and personalized marketing, improve the overall ordering experience and even leverage some AI to help us supplement kind of the call center and have better customer interactions to have better engagement when folks can’t get through the restaurant on a busy Friday or Saturday night. Those are all opportunities still ahead.

And we can get at them really quickly with a great partner that’s super hungry to figure out how we leverage all this great data. And the thing that we’re blessed with is we’ve got purity of data. I mean, you’ve got thirty or forty years of great data, which really gets our tech and marketing teams super excited. But the partners that we work with equally excited to go figure out how you mine it to connect to the consumer even better to drive that one more purchase experience.

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: Brian, the the the most consistent conversation I have with with Kevin is, like, what is our next action to shorten the distance to the next transaction? And that is constantly what we spend our time on. And that can happen on on a really microscale that as soon as we identify you, making sure that within a few clicks, we can get to ordering your last, your your last purchase. Or it could be on trigger based marketing campaigns that understand your consumer profile. So that’s the conversation that Kevin, Jen, and I are always happy.

And we know that if we do that and take friction out of the consumer journey, we’re gonna win their loyalty over time when there’s a payoff with a fantastic quality pizza at the end.

Brian Bittner, Restaurant Analyst, Oppenheimer: I think we just need to do one quick touch on party just because it’s a popular topic right now in the pizza space. You guys have been on party platforms since early twenty nineteen. That piece of your business has grown nicely to close to 17% of your sales. Obviously, big competitor has been on Uber for over a year now getting on DoorDash now. Can you talk about your confidence in protecting your market share on these platforms?

It’s been a popular question amongst the investment community, and I just love your thoughts on that on that topic.

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: Yeah. Maybe I’ll start and Todd jump in. we we’ve we’ve been in this game for for six years, so we’ve learned a lot. We’ve also seen what happens when competitors do join the space, and we actually grow through those moments. And we also learn how we’re gonna continue to adapt and and adjust.

We think that the pizza category broad strokes is still underpenetrated in the aggregators. We think that we have been quite successful and continue to show really strong strength in terms of our ability to grow even with growing competition in that space. And we actually think because we’re 10% to 11% market share, now we get to fight for placement. And it actually is a net advantage to us to continue to grow because we think that this brand deserves more market share. We believe that we have a great quality proposition and a great price point in the aggregators.

And we think that we’ll continue to grow and take share over time, not only in the aggregators, but in our broader market. And if I zoom further back out, we still see a tremendous opportunity to accelerate and grow our carryout business. So we see multiple vectors of growth opportunity for this business over time. So we are going to compete where the consumer is, and our economic model allows for that. But there’s growth opportunities in party and party, and consumers are pulling from this brand.

Todd Penegor, President and CEO, Papa John’s: I think it’s well said. I think, you know, 3P and 1P are going to have to learn to coexist. I think, you know, our best experiences have to happen in party delivery and we’ll continue to amp up, you know, our app and our loyalty program. And we’re not done. We’ll continue to evolve all of that.

But party extends the reach. I mean, we don’t have drivers clocked in early in the day, late at night. There’s opportunities. And we’ve got to create equal experiences in both, but the best in P. But I do think we’re uniquely positioned where our share is.

Pizza can grow in party still as it’s underpenetrated, underrepresented. And we’ve had a nice commanding position. And I do think quality and news and innovation certainly help in 3P. And we’ve got a lot of that in front of us, which will have us compete well. And I think several of the PISA folks can win together.

It doesn’t have to be expensive one another. I think we can all win together. And we’ve seen that in some of the sequential improvements with our business all being on track with some of the competitors come into a new 3P channel now. So we’re feeling confident that we’ll continue to build on that momentum.

Brian Bittner, Restaurant Analyst, Oppenheimer: Great. And I know we’re jumping around a bit here, but there’s a lot of pieces of the business I want to get to. And I just want to ask about the supply chain business. There was a very interesting comment on the last earnings call where you talked about how you were looking to optimize the value proposition of your supply chain business for franchisees. I know you’re not ready to announce anything specific yet, but can you just maybe unpack what this means exactly?

What what’s the ultimate goal of this strategy and what you were hinting at on the last earnings call?

Todd Penegor, President and CEO, Papa John’s: We’ve taken a hard look at our overall supply chain. You look at the white glove service and the cost to serve all the restaurants across The US, and you look at the capacity and how it’s utilized and where we’re located. We’ve done a nice inside out and outside in look at all of that and really changing the mindset to make sure we’re not just a cost plus model, but we’re really driving productivity, efficiency and cost savings that can fuel reinvestment to drive the economic model. So folks will reinvest into technology and into their people and into reimaging and into new builds over time. So we’ve been pleasantly surprised that we see a lot of opportunity.

We know we can get after them. We would expect to start to see some of those savings transpire and hit into the P and L in 2026. But the team is moving quickly with great urgency, and we’re getting smarter every day with the work that’s underway. And we’ll be prepared in the upcoming quarter or two to start sharing a little bit more and start to build some of that confidence around the cost savings and productivity into the outlook into the future. But Rob, you spent a lot of time going through it.

I mean, just your level of confidence, some of the things we’ve seen, some of the hope and optimism on what we might be able to unlock there.

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: Real tangible growth opportunities and and cost savings opportunities for us that we’ve identified. And this was really in the spirit of protecting the quality of our product and improving the four wall economics. So we’ve identified a a list of of efforts and actions we can take that continue to maintain and drive our quality proposition, but take cost out. And it’s optimizations in in the transportation. It’s optimizations in how we deliver to the back of house.

It’s how we look at, our network strategy as a whole. And, I I think as Todd talked about, like, we’ll start to see these benefits flow through the p and l in 2026. And we think that, giving ourselves the opportunity to serve the consumer with the best possible price with a fantastic quality product is a winning recipe for long term market share gains and development opportunity.

Brian Bittner, Restaurant Analyst, Oppenheimer: Great. And when I think about your 2025 financial outlook on the unit growth side, it it assumes about 2% global unit growth. And I know that includes some cleanup that you’re doing, perhaps some refranchising, which maybe we’ll have time to talk about. But are you able to talk about the normalized unit growth you think is the right level for this business across international, across North America as we look out over the past several years?

Todd Penegor, President and CEO, Papa John’s: Yes. Well, I’ll start. I think the good news, everything’s on track on the development front in both The U. S. And the international front as we sit here today.

I know it’s been a little more difficult for a lot of the franchise community, even the company restaurants over the last twelve months on the economic model. But we’re making improvements every day. And there’s a lot of confidence that those improvements will continue with the business momentum that we’re seeing that gives the franchise community and even the company the confidence to keep investing to build out new restaurants. We know we’ve got a lot of opportunity to infill in some of our top market share markets. We know we’ve some white space to continue to grow still in The U.

S. And there’s a lot of untapped potential across our international business. Robbie has gotten very focused to go narrow and deep on a lot of the international business. So we’ve got a little bit of cleanup to support that strategy, but we’re working through that within our guidance. And we’ve done the same in The U.

S. Where we did a little bit of cleanup. But we’re on track and probably worth you just talking a little bit, Ravi, around what do you think kind of the ongoing cadence is once we get past this year on those fronts?

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: Yes. The best way to frame it up is we talked about in prior calls as we expect this spring drift and move towards high single digit system wide sales growth. To us, that’s the real frame. We’re thinking about development opportunity for room is we think that there’s a mix of comp upside still in the business. There’s a mix of development opportunity.

We want to develop the right way. And what that means is strong economic model on a four wall basis, really deliberate and planful strategy. And, you know, in in international, we’ve been going through a transformation over over the last years, and we’re starting to see the impact of that show up in our results. Our most important territories are growing at a healthy rate, and we had a solid comp in Q1. And I think what we’re most excited about is the growth is very deliberate, it’s thoughtful.

And we see our franchisees more and more engaged in long term marketing strategy, the innovation approach, and being very deliberate on, like, what is the next opportunity in terms of location and growth and how does that fit into the broader marketplace and trade zone strategy. So development is absolutely a focus, but it’s doing through this broader approach of we believe we can take market share and we believe we can accelerate system wide sales. Select refranchising to the question that you had

Todd Penegor, President and CEO, Papa John’s: in there, Brian, will play a role. We’ve got a strong company portfolio. We know where our core markets are, where we got a number one or two share, and we’ll continue to grow at those markets. But we got some other great markets that we’ll have to take a look at. If we can recruit some new franchisees in or scale up some existing franchisees that are great brand stewards and partners, it will give us an opportunity to really double down and really solidify some of the growth opportunities that we have in the future.

So that is a tool in the toolbox that’s still ahead of us to continue to fuel some growth.

Brian Bittner, Restaurant Analyst, Oppenheimer: And on the refranchising, you do have a five forty company owned units that you operate. You did say on the last call that you expect the initial set of units that will be refranchised to be accretive to your financial model perhaps in the half of the year. Can you just unpack that a little bit and help us understand what is your goal, as far as what you’re going to do with the cash proceeds from the refranchising process?

Ravi Thanawala, CFO, Executive VP of International, Papa John’s: Yes. I’ll start and then I’ll jump in. So see an opportunity to refranchise selectively, especially when there’s an opportunity to bring in great operators into the system who have a great the right growth mindset. So the specific comments that we made is there is a unique opportunity in our portfolio, I wouldn’t say is indicative of our own total fleet that we we could refranchise and end up EPS accretive, and there’s a unique structure there that we’re working through. But more broadly, we see growth oriented franchisees wanting to join the system.

And as we think about our our broader capital structure, like, we we continue to maintain a balanced approach of wanting to return value to shareholders, paying down debt, and investing to grow. And and we see clear opportunity for us to continue to, like, think about refranchising not only as part of our our growth narrative with franchisees, but just what we spend all of our time as a business focusing on and we think about our core business model is being a fantastic franchisor.

Todd Penegor, President and CEO, Papa John’s: Yes. And I think as we do some of the select room refranchising, I mean, we do have a strong balance sheet to start. We got an opportunity to continue to invest in growth. And we know we got a lot of growth levers, right? When you think about investments into technology or investments into reimaging some of our own restaurants, some opportunities to infill in the company markets, there’s a lot of opportunities to drive profitable growth.

And that’s where our mindset will start at And if we got some excess cash, we can pay down some debt and keep that strong balance sheet in play or think about other ways to return cash to shareholders. But we feel good that we’re in a position with a lot of leverage to pull ahead of us to continue to drive the momentum in this business.

Brian Bittner, Restaurant Analyst, Oppenheimer: Well, given that we’re out of time, that’s a perfect spot to end. Todd, Robbie, Heather, thank you so much for joining us today and participating in our conference. I hope everybody has a wonderful rest of their day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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