Papa John’s International, Inc, the Kentucky-headquartered pizza chain, is apparently planning a sharp turnaround as the business struggles to keep up the momentum. Recent reports show U.S. customers are ordering less from Papa John’s, reflecting a slowdown in domestic sales.
The system-wide restaurant sales remained largely unchanged at $4.92 billion, Papa John’s said while announcing the Q4 and full-year results for the financial year 2025.
Inside the 2025 Store Additions
In 2025, Papa John’s managed to open 279 new restaurants worldwide with 96 new stores in North America and 183 new footprints spread across the international market.
The net store additions were below than one-fifth of all new openings as the fourth-largest pizza restaurant chain of the US closed 226 stores in the year under review.
Notably, Papa John’s has refranchised 85 stores in North America, shifting the course from company-owned stores to Franchise-owned stores.
The total store-count stood at 6,083 with a net addition of 53 stores, 9 in North American and 44 at international locations. In North America, the company-owned locations were reduced to 462 at the end of December 28, 2025, from 539 as on December 29, 2024.
300 US Stores Eyeing Closure
With aggressive cost-cutting measures on the cards, Papa John’s will be closing nearly 300 stores across North America by the end of 2027.
The majority of these decade-old restaurants are underperforming, not able to show clear signs of financial improvement and are not meeting the brand expectations, Ravi Thanawala, Chief Financial Officer and President, North America, Papa John’s International, Inc, indicated in the earnings call.
The company expects an effective transfer of sales will happen to nearby stores after closing the underperforming restaurants. This looks like a strategic reset as the brand is leaving no stone unturned to increase the profits, while maintaining the efficiency.
Of the 300 stores, 200 restaurants will face a closure in 2026 itself as most of them are operating at negative Four-Wall EBITDA.
U.S. Sales Slip as International Demand Rises
The comparable store sales for Papa John’s saw a decline of 5% in the fourth quarter ended on December 28, 2025, with North American restaurants taking the maximum hit. The sales from company-owned and franchised restaurants fell 6% and 5%, respectively.
On the other hand, the comparable store sales in the international market grew 6% as against the fourth quarter of last year.
The sales dip in North American restaurants happened even after the company opened 41 new restaurants in the region. The system-wide sales fell marginally (-1%) to $1.23 billion, while the brand started restaurants at 142 new locations.
The North American region has been widely affected by a weak consumer backdrop, coupled with high promotional costs. This could either translate into less footfalls, or people choosing to spend less.
The brand is aiming to revive operational efficiency with a slew of cost-saving measures, including optimizing the number of stores and supply chain management. Fresh programs are likely to save $25 million outside of marketing by 2027, with nearly $13 million to be recognized across 2026.
How Was 2025 for Papa John’s
The entire fiscal remained dull for Papa John’s, as far as sales, revenue and profitability were concerned. The net income for the pizza giant plunged nearly 62% to $32 million for the year ended December 28, 2026, from the year-ago income of $84 million.
“The decrease was primarily due to a pre-tax gain of $41.3 million associated with the sale of two QC Center properties in the prior year,” the company said in a SEC filing.
The comparable store sales dipped 2% with North American restaurants showing continued signs of weakness. The sales of franchised and company-owned stores fell 2% and 3%, respectively, while international markets saw a sales of 5% as compared to the previous year.
The global restaurant sales were 1% lower at $4.92 billion, while the revenue was unchanged at $2.1 billion.
The company believes that the results for FY25 can’t be equated with previous year, largely due to refranchising transactions, sale of quality control center and restaurant closures that happened in second and third quarter of 2024.
Slice Battle: Papa John’s vs Dominos vs Pizza Hut
With a weaker result, Papa John’s continues to remain the fourth-largest pizza restaurant chain in the US. Pizza Hut also had a rough year in terms of flat growth and challenges in the while Dominos cemented its respective position at the top.
Earlier this week itself, America’s largest pizza restaurant chain Dominos reported a same store sales growth of 3.7% in Q4 and 3% for FY25 in the US.
“In 2025 we demonstrated that when we execute our Hungry for MORE strategy it delivers MORE sales, MORE stores, and MORE profits,” said Russell Weiner, Domino’s Chief Executive Officer. “In our international business, we delivered a remarkable 32nd consecutive year of same store sales growth,” he added.
Dominos clocked a revenue of $20.13 billion, up 5.4% for FY25, while adding 172 net new stores in the U.S. and considerable growth in international markets including China and India.
Pizza Hut delivered a flat revenue of $1.01 billion. The parent company Yum! Brands, Inc. has commenced a review of strategic options for Pizza Hut, Ranjith Roy, CFO, indicated in a release.
At the end of fiscal year 2025, the worldwide store count for Pizza Hut stood at 19,974, Dominos at 22,142 as against the 6,083 stores of Papa John’s.
Papa John’s Prepares for a U.S. Sales Slowdown in 2026
The company expects its global sales to remain flat in 2026, it may increase by low single digits, whereas North American sales will shrink by up to 4%. Weakness in the home market has never been a good sign for a global corporation, having tip-toed markets for several years in continuity.
A dip in the North American market implies that more Americans are going to skip the Pizza slice at Papa John’s restaurants. However, the company plans to open 40 to 50 new stores in the North American region, while the international market may witness up to 220 new restaurants.
With a capital expenditure of $70 to $80 million, the company is targeting to generate an adjusted EBITDA in a range of $200 million to $210 million.
Management’s View
“We are encouraged by the progress we are making in our transformation as we further reinforce our brand health, sharpen our value proposition, build our innovation pipeline and enhance the customer experience. These actions, alongside recent changes to our organizational structure to drive efficiencies, provide a strong foundation for our future,” said Todd Penegor, President and CEO, Papa John’s International, Inc.
“In 2026, we are focused on continuing our transformation work to best position Papa Johns to win in a dynamic QSR category. Our strong balance sheet is supporting investment in these initiatives, which we believe will deliver high returns. We look forward with confidence in our ability to generate sustainable, profitable growth, and value creation,” Penegor added.
While North American sales face headwinds, the brand is leaning on cost-saving measures, strategic store optimization, and international growth to regain momentum.
