Pizza giant, Papa John’s International, Inc. PZZA, has seen its earnings estimates steadily fall off a cliff over the last several years, driven by declining comparable sales, cost pressures, and heavy competition from its rivals such as Domino’s.
PZZA’s most recent wave of downward earnings revisions earn it a Zacks Rank #5 (Strong Sell).
PZZA Stock is Down 70%: It’s Not Time to Buy the Dip Yet
Papa John’s boasts that it is the third-largest pizza delivery company on the planet, with more than 6,000 restaurants in approximately 50 countries and territories. The firm operates across four main segments: Domestic Company-Owned Restaurants, North America Franchised Restaurants, North America Restaurants, and International Restaurants.
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PZZA revenue dropped 3.6% in FY24 and slipped slightly in 2025. Its North America comparable sales fell 2% in FY25, with Domestic Company-owned restaurants down 3% and North America franchised restaurants down 2%. Worst still, its GAAP earnings tanked 64% YoY and its adjusted EPS fell 39%.
Most recently, its first-quarter 2026 revenue fell 7.7% YoY, with North America comparable sales down 6.4%. “In North America, results were in line with our expectations as we navigate the cautious consumer environment and promotional QSR marketplace,” CEO and President Todd Penegor said in prepared remarks.
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Its adjusted EPS also slipped 11% YoY, falling 20% short of our estimate. Papa John’s earnings outlook has dropped significantly over the last 90 days, and its most accurate estimate for FY27 came in 9% below the already beaten-down consensus.
This backdrop earns PZZA a Zacks Rank #5 (Strong Sell) and has prolonged its string of negative EPS revisions over the last several years.
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Papa John’s faces intense competition from Domino’s DPZ, Pizza Hut, and other chains, forcing discounting and promotions. The company is also struggling, alongside many others, with slower consumer spending as consumers around the U.S. pull back on non-essentials as inflation continues.
Some investors might consider taking a bite out of Papa John’s stock since it is already down 70% over the past five years. But it could be best for investors to stay away from Papa John’s shares, at least for now.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
