Papa John’s Reports Modest Revenue Growth and Decline in Net Income for Q1 2025

Papa John’s International, Inc. reported a modest increase in total revenues for the first quarter of 2025, reaching $518.3 million, a 0.9% increase from $513.9 million in the same period last year. The growth was driven by a 5.3% increase in commissary revenues, which totaled $228.9 million, and a 17.8% rise in advertising funds revenue, amounting to $43.7 million. However, company-owned restaurant sales declined by 9.1% to $173.9 million, primarily due to a decrease in transaction volumes and ticket sizes in domestic locations, alongside a significant drop in sales from UK operations following the closure of underperforming restaurants.

In terms of profitability, net income attributable to the company fell to $9.2 million, or $0.28 per share, compared to $14.6 million, or $0.45 per share, in the prior year. This decline in net income was attributed to increased general and administrative expenses, which rose to $65.2 million from $57.9 million, largely due to higher marketing investments and costs associated with the company's international restructuring plan. Operating income also decreased to $24.0 million from $33.7 million in the previous year, reflecting the impact of rising costs and lower sales.

Strategically, Papa John’s has been focusing on enhancing its marketing and digital strategies. The company launched a new marketing campaign, "Meet the Makers," aimed at improving customer engagement and value perception. Additionally, the company is investing in its technology infrastructure, including a partnership with Google Cloud to enhance the ordering and delivery experience. The company opened 47 new restaurants during the quarter, with 18 in North America and 29 internationally, as part of its ongoing development strategy.

Operationally, the company reported a total of 6,019 restaurants in operation as of March 30, 2025, comprising 552 company-owned and 5,467 franchised locations. The company’s international transformation plan, which includes the closure of unprofitable locations and refranchising efforts, is nearing completion, with expectations to enhance profitability in key markets. The company also reported a significant increase in cash provided by operating activities, totaling $31.3 million, compared to $12.0 million in the prior year, indicating improved cash flow management.

Looking ahead, Papa John’s remains focused on navigating a challenging macroeconomic environment while pursuing growth opportunities. The company anticipates continued investments in marketing and technology to drive sales and improve customer experience. The outlook for the remainder of 2025 includes a commitment to enhancing operational efficiency and profitability, particularly in international markets, as the company completes its restructuring initiatives.