PAPA JOHNS INTERNATIONAL INC
For the period ended Jun 29, 2025. Filed Aug 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 29, 2025 · Filed Aug 7, 2025
PZZA$19.73-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-30; filed 2025-05-08.
0001628280-25-023439
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-29; filed 2025-08-07.
0001628280-25-038569
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 137 previous paragraphs and 144 current paragraphs.
77 unchanged; 50 reworded; 15 added; 9 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
•Domestic commissary growth strategy: We continue to evolve our commissary business to drive profitable growth and improve overall supply chain productivity across the system. We have undertaken an internal review of our supply chain and have identified several initiatives that we believe will optimize our commissary business in an effort to reduce the overall cost to serve our Domestic Company-owned and franchised restaurants. Management has not yet finalized the timing and extent to which these initiatives will be implemented, but currently believe that we will begin recognizing cost savings from these initiatives in 2026.
Current report
Total revenues increased $21.3 million, or 4.2%, to $529.2 million for the three months ended June 29, 2025 and increased $25.7 million, or 2.5%, to $1.05 billion for the six months ended June 29, 2025, as compared to the prior year comparable periods. Changes in total revenues were impacted by the transactions noted above and as detailed in the discussions below.
Current report
Advertising funds revenue, which includes the operations of PJMF as well as local and International marketing funds, increased $2.2 million, or 5.2%, and increased $8.8 million, or 11.1%, for the three and six months ended June 29, 2025, respectively, as compared to the prior year comparable periods. The increases for the three and six month periods were primarily driven by increases in the PJMF contribution percentage, which took effect in the second quarter of 2024, as well as increases to contribution percentages in certain International markets. The increase in advertising funds revenue also results from global system-wide restaurant sales growth of 3.5% and 2.1% for the three and six months ended June 29, 2025, respectively.
Current report
(b) The North America franchising segment does not incur costs of sales, and therefore is not included in total cost of sales by segment. The North America franchising segment consists of our franchise sales and support activities for our franchisees located in the United States and Canada.
Current report
(c)For the three and six months ended June 29, 2025, other costs is comprised of the following:
Current report
i. Losses on disposal of equipment incurred in connection with the termination of a COVID-era program that pre-purchased store equipment due to supply chain challenges;
Current report
iii. Costs incurred, net of anticipated insurance recoveries, arising from tornadoes that struck the Texas Quality Control Center (“QC Center”) as well as the restaurant support center and QC Center in Louisville, Kentucky.
Current report
For the three and six months ended June 30, 2024, represents a non-cash impairment charge related to fixed and intangible assets related to certain Domestic restaurants. Refer to Note 2. Significant Accounting Policies of the “Notes to Condensed Consolidated Financial Statements” for further details.
Current report
Depreciation and amortization expenses were $18.8 million, or 3.6% of total revenues, and $37.2 million, or 3.5% of total revenues for the three and six months ended June 29, 2025, respectively, as compared to $17.6 million, or 3.5% of total revenues and $35.3 million or 3.5% of total revenues for the prior year comparable periods, respectively. The increases were primarily due to higher depreciation expense related to our investments in technology platforms.
Current report
(b)For the three and six months ended June 29, 2025, other costs is comprised of the following:
Current report
i. Losses on disposal of equipment incurred in connection with the termination of a COVID-era program that pre-purchased store equipment due to supply chain challenges;
Current report
iii. Costs incurred, net of anticipated insurance recoveries, arising from tornadoes that struck the Texas Quality Control Center (“QC Center”) as well as the restaurant support center and QC Center in Louisville, Kentucky.
Current report
For the three and six months ended June 30, 2024, represents a non-cash impairment charge related to fixed and intangible assets related to certain Domestic restaurants. Refer to Note 2. Significant Accounting Policies of the “Notes to Condensed Consolidated Financial Statements” for further details.
Current report
Enactment of the “One Big Beautiful Bill Act”
Current report
On July 4, 2025, the “One Big Beautiful Bill Act,” a comprehensive tax and spending bill, was signed into U.S. law. The legislation includes changes to the U.S. corporate tax system; refer to “Note 12. Subsequent Events” of the “Notes to Condensed Consolidated Financial Statements” for further details. We anticipate that the enactment of this bill will result in an estimated $10 million to $15 million reduction in cash taxes to be paid during the second half of 2025 due to the reinstatement of 100% bonus depreciation and full expensing for domestic research and development expenditures.
Removed paragraphs (9)
Previous report
•Domestic commissary growth strategy: We continue to evolve our commissary business to drive profitable growth and overall supply chain productivity that provides cost savings and incremental profit across the system. Effective in the first quarter of 2025, we increased the fixed operating margin that Domestic QC Centers charge by 100 basis points, and we will continue to increase the margin by the same increment in each of the next two years, moving from 4% in 2023 to 8% in 2027. To mitigate this cost for franchisees, we continue to offer opportunities for franchisees to earn annual incentive-based rebates as they increase volume and open new restaurants. Additionally, we expect the incremental volume driven by increased marketing and additional development will reduce the shared supply chain costs across the system over time. We are continuing to evaluate opportunities to enhance productivity and profitability throughout the supply chain through improved operations and supplier relationships.
Previous report
•We evaluated and optimized our restaurant portfolio in the UK, which resulted in the closure of 43 underperforming UK Company-owned restaurants and 30 franchised locations. We also completed the refranchising of 60 formerly Company-owned restaurants to primarily existing franchisees and continue to operate 13 Company-owned restaurants in the UK. We have completed substantially all of the strategic restaurant closures in the UK market and the Company’s efforts have turned toward growth opportunities and mitigating closure-related costs as we complete the optimization of the portfolio through exiting leases and other contracts as well as transforming our operations to increase efficiency and effectiveness.
Previous report
•We established hubs for our key regions – APAC (Asia Pacific), EMEA (Europe, Middle East and Africa), and Latin America to align global best practices in operations, marketing and technology with local preferences to accomplish our long-term objective of increasing market share in key markets around the world.
Previous report
Total revenues increased $4.4 million, or 0.9%, to $518.3 million for the three months ended March 30, 2025 as compared to the prior year comparable period.
Previous report
Advertising funds revenue, which includes the operations of PJMF, local marketing funds and International marketing funds, increased $6.6 million, or 17.8%, for the three months ended March 30, 2025 compared to the prior year comparable period. Beginning with the second quarter of 2024, PJMF increased its contribution percentage, which increased Advertising funds revenue.
Previous report
(c)Represents expenses incurred, net of expected insurance recoveries, resulting from a tornado that struck our Texas QC Center in March 2025. See “Note 2. Significant Accounting Policies” for additional details.
Previous report
Depreciation and amortization expense was $18.3 million, or 3.5% of revenues for the three months ended March 30, 2025, as compared to $17.7 million, or 3.4% of revenues for the prior year comparable period.
Previous report
(b)Represents expenses incurred, net of expected insurance recoveries, resulting from a tornado that struck our Texas QC Center in March 2025. See “Note 2. Significant Accounting Policies” for additional details.
Previous report
(c)Represents costs associated with project-based strategic initiatives. We consider these costs to be separate and distinct from other professional fees incurred in the ordinary course of business and not reflective of the ongoing costs to operate our business.
Reworded paragraphs (50)
Previous wording
Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark “Papa John’s.” Papa Johns began operations in 1984. At March 30, 2025, there were 6,019 Papa John’s restaurants in operation, consisting of 552 Company-owned and 5,467 franchised restaurants operating in 50 countries and territories. Our revenues are derived from retail sales of pizza and other food and beverage products to the general public by Company-owned restaurants, franchise royalties, and sales of franchise and development rights. Additionally, we derive revenues from sales to franchisees of various items including food and paper products from our North America Quality Control Centers (“QC Centers”) and operation of our International QC Center in the United Kingdom (“UK”), contributions received by Papa John’s Marketing Fund (“PJMF”) which is our national marketing fund, and fees related to the use of information systems equipment as well as software and related services. We believe that in addition to supporting both Company and franchised profitability and growth, these activities contribute to product quality and consistency throughout the Papa Johns system.
Current wording
Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark “Papa John’s.” Papa Johns began operations in 1984. At June 29, 2025, there were 5,989 Papa John’s restaurants in operation, consisting of 554 Company-owned and 5,435 franchised restaurants operating in 50 countries and territories. Our revenues are derived from retail sales of pizza and other food and beverage products to the general public by Company-owned restaurants, franchise royalties, and sales of franchise and development rights. Additionally, we derive revenues from sales to franchisees of various items including food and paper products from our North America Quality Control Centers (“QC Centers”) and operation of our International QC Center in the United Kingdom (“UK”), contributions received by Papa John’s Marketing Fund (“PJMF”) which is our national marketing fund, and fees related to the use of information systems equipment as well as software and related services. We believe that in addition to supporting both Company and franchised profitability and growth, these activities contribute to product quality and consistency throughout the Papa Johns system.
Previous wording
During the first quarter of 2025, we continued to build momentum and make progress on executing our strategic priorities as we position the business for long-term success while also navigating a dynamic macroeconomic and competitive environment. We continue to put our efforts and investments toward initiatives that improve our price/value perception and improve our digital and loyalty experience to increase conversion and reduce friction within the customer experience. Our key areas of focus are:
Current wording
During the second quarter of 2025, we remained focused on executing our strategic priorities and returned to growth in our key comparable sales metric in North America as we position the business for long-term success while continuing to navigate a dynamic macroeconomic and competitive environment. We continue to put our efforts and investments toward initiatives that improve our price/value perception and improve our digital and loyalty experience to increase conversion and reduce friction within the customer experience. Our key areas of focus are:
Previous wording
•Marketing strategy: During the first quarter of 2025, we invested in our messaging and promotions on showcasing our BETTER INGREDIENTS. BETTER PIZZA® platform through the launch of our “Meet the Makers” marketing campaign, which highlights the craftsmanship and passion behind the products we serve. We also focused marketing efforts on improving our value perception, such as emphasizing our Papa Pairings at appropriately-valued price points. We believe if we maintain an appropriate balance of value offerings and premium products, it will lead to improving sales trends and transactions over time. In 2025, we anticipate spending up to an additional $25 million in marketing investments, including investments in our customer relationship management platform and our loyalty program, when compared with 2024. This incremental spend will focus on ensuring a strong presence nationally as well as in key regional and local markets while leveraging our data to create more personalized offers for our customers.
Current wording
•Marketing strategy: During the second quarter of 2025, we furthered our investments in our messaging to showcase our BETTER INGREDIENTS. BETTER PIZZA® platform through our “Meet the Makers” marketing campaign, highlighting our six simple ingredients and fresh, never frozen dough and the craftsmanship behind the products we serve. We also focused marketing efforts on improving our value perception, such as emphasizing our Papa Pairings at appropriately-valued price points. We believe if we maintain an appropriate balance of value offerings and premium products, it will lead to improving sales trends and transactions over time. We anticipate spending up to an additional $25 million in marketing investments throughout 2025, including investments in our customer relationship management platform and our loyalty program, when compared with 2024. This incremental spend will focus on ensuring a strong presence nationally as well as in key regional and local markets while leveraging our data to create more personalized offers for our customers.
Previous wording
•Digital and loyalty strategy: Most of our sales occur through digital channels and we are actively identifying opportunities for customers to more quickly access information, streamline the ordering journey and improve the overall user experience. We are also placing additional focus on strategic investments in our technology infrastructure, with our recently announced partnership with Google Cloud to enhance our ordering and delivery experience serving as an example of our commitment to delivering a superior customer experience. In the fourth quarter of 2024, we also updated our loyalty program to allow members to unlock redeemable rewards in the form of “Papa Dough” faster by converting points to Papa Dough in smaller increments. We are pleased with the early response on the lower redemption threshold, which we believe will activate our members at higher rates to help drive transactions and frequency. We will continue evolving our loyalty and digital experiences as they must be flexible and easy to understand to create strong, emotionally connected consumer engagement that seamlessly integrates with our creative, paid, earned and owned messaging.
Current wording
•Digital and loyalty strategy: Most of our sales occur through digital channels, and we are placing additional focus on strategic investments in our technology infrastructure. Our recently announced partnership with Google Cloud to enhance our ordering and delivery experience serves as an additional example of our commitment to delivering a superior customer experience. We are currently developing and beta testing our new omnichannel experiences, including a new app for iOS and Android to improve navigation and order tracking. We believe these rollouts will enable customers to streamline the ordering journey and simplify the overall user experience. In the fourth quarter of 2024, we also updated our loyalty program to allow members to unlock redeemable rewards in the form of “Papa Dough” faster by converting points to Papa Dough in smaller increments. Though the lower redemption threshold slightly decreased our overall ticket size during the quarter, we are pleased with the response to the lower redemption threshold, which has activated our members at higher rates to help drive transactions and frequency. We will continue evolving our loyalty and digital experiences as they must be flexible and easy to understand to create strong, emotionally connected consumer engagement that seamlessly integrates with our creative, paid, earned and owned messaging.
Previous wording
•Development strategy: Development is a key long-term growth driver as we believe there is significant opportunity to offer our quality product to more customers globally and domestically. During the first quarter, we opened 47 new restaurants systemwide, comprised of 18 restaurant openings in North America and 29 restaurant openings in International markets. To pursue the opportunities we have identified in the United States and accelerate development, we are offering a three-year waiver of PJMF contributions for new restaurants opened in 2025, which is intended to deliver higher restaurant-level profit margins, add scale in key markets and attract growth-driven franchisees. Additionally, we continue to evaluate refranchising Company-owned restaurants within various Domestic markets to provide opportunities for growth-minded franchisees to grow their businesses, along with considering strategic closures in certain International markets.
Current wording
•Development strategy: Development is a key long-term growth driver as we believe there is significant opportunity to offer our quality product to more customers globally and domestically. During the second quarter, we opened 45 new restaurants systemwide, comprised of 19 restaurant openings in North America and 26 restaurant openings in International markets. To pursue the opportunities we have identified in the United States and accelerate development, we are offering a three-year waiver of PJMF contributions for new restaurants opened in 2025, which is intended to deliver higher restaurant-level profit margins, add scale in key markets and attract growth-driven franchisees. Additionally, in July 2025 we signed an agreement to sell our ownership stake in a joint venture that operates 85 restaurants, with the transaction expected to close by the end of 2025. We are excited to offer growth-minded franchisees opportunities to expand their businesses and will continue to evaluate refranchising Company-owned restaurants within various Domestic markets, along with considering strategic closures in certain International markets.
Previous wording
In December 2023, the Company announced international transformation initiatives (“International Transformation Plan”) designed to evolve our business structure to deliver an enhanced value proposition to our International customers and franchisees, ensure targeted investments and efficient resource management, and better position certain international markets, including the United Kingdom, for long-term profitable growth and brand strength. Total estimated pre-tax costs associated with the International Transformation Plan are expected to be approximately $33 million to $35 million (inclusive of the $31.6 million incurred through the first quarter of 2025), the remainder of which we expect to be recognized in 2025. See “Note 9. Restructuring” of “Notes to Condensed Consolidated Financial Statements” for additional details.
Current wording
In December 2023, the Company announced international transformation initiatives (“International Transformation Plan”) designed to evolve our business structure to deliver an enhanced value proposition to our International customers and franchisees, ensure targeted investments and efficient resource management, and better position certain international markets, including the United Kingdom, for long-term profitable growth and brand strength. Total estimated pre-tax costs associated with the International Transformation Plan are expected to be approximately $35 million (inclusive of the $34.1 million incurred through the second quarter of 2025), the remainder of which we expect to be recognized in 2025. See “Note 9. Restructuring” of “Notes to Condensed Consolidated Financial Statements” for additional details. The Company is in the final stages of executing the International Transformation Plan, which is expected to be completed during 2025.
Previous wording
(a)System-wide sales for the three months ended March 31, 2024 include $0.4 million of International sales related to the first quarter of 2024 that were erroneously omitted in prior periods.
Current wording
(a)System-wide sales for the three and six months ended June 30, 2024 include $6.7 million and $7.1 million, respectively of International sales related to the first and second quarters of 2024 that were erroneously omitted in prior periods.
Previous wording
During the year ended December 29, 2024, the Company implemented several financial statement changes in its Annual Report on Form 10-K, concurrent with the adoption of Accounting Standard Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures.” These changes evolve and modernize our financial statements and footnotes to increase transparency and better reflect management’s key performance metrics. Presentation changes to the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows have been applied retrospectively, and as such, the results from the three months ended March 31, 2024 have been reclassified for consistency with the current year presentation.
Current wording
During the year ended December 29, 2024, the Company implemented several financial statement changes in its Annual Report on Form 10-K, concurrent with the adoption of Accounting Standard Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures.” These changes evolve and modernize our financial statements and footnotes to increase transparency and better reflect management’s key performance metrics. Presentation changes to the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows have been applied retrospectively, and as such, the results from the three and six months ended June 30, 2024 have been reclassified for consistency with the current year presentation.
Previous wording
Additionally, during the year ended December 29, 2024, the Company updated its internal cost allocation methodology to better reflect current levels of time and effort spent managing our different segments. These updates resulted in a higher allocation of previously unallocated corporate expenses to primarily each of the North America franchising and International segments. This update in methodology did not impact total reported expenses and was implemented prospectively beginning with the year ended December 29, 2024, and as such comparative information has been recast.
Current wording
Additionally, during the year ended December 29, 2024, the Company updated its internal cost allocation methodology to better reflect current levels of time and effort spent managing our different segments. These updates resulted in a higher allocation of previously unallocated corporate expenses to primarily each of the North America franchising and International segments. This update in methodology did not impact total reported expenses and was implemented prospectively beginning with the year ended December 29, 2024, and as such prior-period comparative information has been recast.
Previous wording
Company-owned restaurant sales, which include sales from both Domestic and International Company-owned restaurants decreased $17.4 million, or 9.1%, for the three months ended March 30, 2025 as compared to the prior year comparable period. The decrease was primarily due to an $11.9 million decline in revenues from our Company-owned restaurants in the UK due to the transactions discussed above. The decrease also results from a $5.4 million decline in revenue from our Domestic Company-owned restaurants, reflecting a 4.6% decline in Domestic comparable sales as a result of lower transaction volumes and ticket sizes.
Current wording
Company-owned restaurant sales, which include sales from both Domestic and International Company-owned restaurants, decreased $5.7 million, or 3.1%, for the three months ended June 29, 2025 and decreased $23.0 million, or 6.1%, for the six months ended June 29, 2025, as compared to the prior year comparable periods. The decrease was primarily due to declines of $8.2 million and $20.2 million in revenues from our Company-owned restaurants in the UK, respectively, due to the transactions discussed above. The decrease for the three months ended June 29, 2025 is partially offset by a $2.6 million increase in revenue from our Domestic Company-owned restaurants due to higher average ticket that drove comparable sales growth of 0.3%, partially offset by the refranchising of 15 restaurants in the prior year. The decrease for the six months ended June 29, 2025 is also a result of a $2.8 million decline in revenue from our Domestic Company- owned restaurants, reflecting a 2.1% decline in Domestic comparable sales as a result of lower transaction volumes and the refranchising of 15 restaurants in the prior year, partially offset by higher average ticket.
Previous wording
Franchise royalties and fees, which include revenues generated from both North American and International franchisees, increased $0.9 million, or 1.9%, for the three months ended March 30, 2025 as compared to each prior year comparable period. The increase was primarily due to 2.7% growth in North America franchised equivalent units compared to the prior year comparable period and International comparable sales growth of 3.2%, partially offset by North America franchised comparable sales declining 2.3% for the three months ended March 30, 2025.
Current wording
Franchise royalties and fees, which include revenues generated from both North American and International franchisees, increased $1.8 million, or 3.8%, for the three months ended June 29, 2025 and increased $2.7 million, or 2.8%, for the six months ended June 29, 2025, as compared to the prior year comparable periods. The increases were primarily due to growth in North America franchised equivalent units of 2.7% and 2.8% and growth in International comparable sales of 3.7% and 3.5% for the three and six months ended June 29, 2025, respectively.
Previous wording
North America franchise restaurant sales decreased to $754.5 million, or 0.4% excluding the impact of foreign currency fluctuations, for the three months ended March 30, 2025 compared to the prior year comparable period. North America franchise restaurant sales are not included in Company revenues; however, our North America franchise royalties are derived from these sales. The main drivers in the lower franchise restaurant sales were the North America comparable sales declines, partially offset by equivalent unit growth noted above.
Current wording
North America franchise restaurant sales increased to $752.3 million, or 2.7% excluding the impact of foreign currency fluctuations, for the three months ended June 29, 2025 as compared to the prior year comparable period. North America franchise restaurant sales increased to $1.51 billion, or 1.1% excluding the impact of foreign currency fluctuations, for the six months ended June 29, 2025 as compared to the prior year comparable period. North America franchise restaurant sales are not included in Company revenues; however, our North America franchise royalties are derived from these sales. The main driver in the higher franchise restaurant sales was the North America equivalent unit growth noted above.
Previous wording
International franchise restaurant sales increased $21.9 million to $297.3 million for the three months ended March 30, 2025 compared to the prior year comparable period. As mentioned above, the UK transactions in the second and third quarters of 2024 impacted the comparability of International franchise restaurant sales earned in each period. Excluding the impact of the UK restaurant changes and foreign currency fluctuations, International franchise restaurant sales would have increased $16.2 million, or 5.6% for the three months ended March 30, 2025. International franchise restaurant sales are not included in Company revenues; however, our international royalty revenue is derived from these sales.
Current wording
International franchise restaurant sales increased $33.0 million to $324.8 million and increased $54.9 million to $622.1 million for the three and six months ended June 29, 2025, respectively. As mentioned above, the UK transactions in the second and third quarters of 2024 impacted the comparability of International franchise restaurant sales earned in each period. Excluding the impact of the UK restaurant changes and foreign currency fluctuations, International franchise restaurant sales would have increased $21.0 million, or 7.0%, and increased $37.0 million, or 6.3%, for the three and six months ended June 29, 2025, respectively. International franchise restaurant sales are not included in Company revenues; however, our international royalty revenue is derived from these sales. The increases were due to growth in International comparable sales of 3.7% and 3.5% for the three and six months ended June 29, 2025, respectively, as well as restaurant growth.
Previous wording
Commissary revenues, which includes sales from our North American and International QC Centers, increased $11.4 million or 5.3% for the three months ended March 30, 2025 as compared to the prior year comparable period. The increase for the three months ended March 30, 2025 was primarily due to higher commodity prices during the quarter, particularly cheese and proteins, as well as the previously-disclosed annual 1% increase to our fixed operating margin charged to Domestic QC Centers that took effect at the beginning of the first quarter of 2025. These increases were partially offset by lower transaction volumes during the quarter.
Current wording
Commissary revenues, which includes sales from our North American and International QC Centers, increased $20.3 million or 9.5% for the three months ended June 29, 2025 and increased $31.7 million or 7.3% for the six months ended June 29, 2025 as compared to the prior year comparable period. The increase for the three and six months ended June 29, 2025 was primarily due to higher prices and higher transaction volumes as compared to the prior year comparable periods.
Previous wording
Other revenues, which primarily includes revenues derived from our online and mobile ordering business, increased $2.8 million, or 13.5% for the three months ended March 30, 2025 compared to the prior year comparable period primarily due to higher revenues generated from technology services as a result of an increase in the technology fee charged to franchisees that began in the second half of 2024.
Current wording
Other revenues, which primarily includes revenues derived from our online and mobile ordering business, increased $2.7 million, or 13.4%, and increased $5.5 million, or 13.4%, for the three and six months ended June 29, 2025, respectively, as compared to the prior year comparable periods primarily due to higher revenues generated from technology services as a result of an increase in the technology fee charged to franchisees that began in the second half of 2024.
Previous wording
Total costs and expenses were approximately $494.3 million, or 95.4% of total revenues for the three months ended March 30, 2025, as compared to $480.2 million, or 93.4% of total revenues compared to the prior year comparable period. This increase in total costs and expenses, as a percentage of revenues, was primarily due to the following:
Current wording
Total costs and expenses were approximately $504.7 million, or 95.4% of total revenues, and $999.0 million, or 95.4% of total revenues, for the three and six months ended June 29, 2025, as compared to $479.7 million, or 94.4% of total revenues, and $959.9 million, or 93.9% of total revenues in the prior year comparable periods.
Previous wording
Cost of sales consists primarily of Company-owned restaurant and supply chain costs incurred to generate related revenues. Components of cost of sales primarily include food and paper products, labor, freight and delivery, occupancy costs, advertising costs related to Company-owned restaurants, and insurance expense. Cost of sales was $366.5 million for the three months ended March 30, 2025, a decrease of $1.2 million from the prior year comparable period. Cost of sales was favorably impacted by approximately $11.0 million due to lower food and labor costs from our Company-owned restaurants in the UK as a result of the restaurant closures and refranchising transactions discussed above, offset by higher commodity costs for our Domestic QC Centers as well as higher food and advertising expenses for our Domestic Company-owned restaurants.
Current wording
Cost of sales consists primarily of Company-owned restaurant and supply chain costs incurred to generate related revenues. Components of cost of sales primarily include food and paper products, labor, freight and delivery, occupancy costs, advertising costs related to Company-owned restaurants, and insurance expense. Cost of sales were $371.7 million and $738.2 million, respectively, for the three and six months ended June 29, 2025, an increase of $8.7 million and $7.5 million, respectively, from the prior year comparable periods. The increases were due primarily to higher volumes for our Domestic QC Centers, higher food costs for our Domestic Company-owned restaurants, and higher local advertising costs for our Company-owned restaurants. These increases were partially offset by decreases of approximately $5.7 million and $17.0 million for the three and six months ended June 29, 2025, respectively, due to lower food and labor costs from our Company-owned restaurants in the UK as a result of the restaurant closures and refranchising transactions discussed above.
Previous wording
Costs of sales by segment for the three months ended March 30, 2025 and March 31, 2024, respectively, were as follows:
Current wording
Costs of sales by segment for the three and six months ended June 29, 2025 and June 30, 2024, respectively, were as follows:
Previous wording
(b)This information is presented on a GAAP basis. As a result, amounts include stock-based compensation expenses that are excluded from our segment results, which are presented on an Adjusted basis (see “Note 11. Segment Information”).
Current wording
(a)Segment cost of sales include stock-based compensation expenses and other adjustments that are excluded from our segment results, which are presented on an adjusted basis (see “Note 11. Segment Information”).
Previous wording
(a) “All other” refers to all other business units that do not meet the quantitative thresholds for determining reportable segments, which primarily includes our online and mobile ordering business and our marketing funds and are not operating segments.
Current wording
(c) “All other” refers to all other business units that do not meet the quantitative or qualitative thresholds for determining reportable segments, and primarily includes our online and mobile ordering business and our marketing funds and are not operating segments.
Previous wording
General and administrative expenses (“G&A”) expenses were $65.2 million, or 12.6% of revenues for the three months ended March 30, 2025, as compared to $57.9 million, or 11.3% of revenues for the prior year comparable period. G&A expenses consisted of the following:
Current wording
General and administrative expenses (“G&A”) expenses were $70.1 million, or 13.3% of revenues, and $135.3 million or 12.9% of revenues, for the three and six months ended June 29, 2025, respectively, as compared to $57.0 million, or 11.2% of revenues, and $114.9 million, or 11.2% of revenues for the prior year comparable periods, respectively. G&A expenses consisted of the following:
Previous wording
(a)Administrative and other general expenses, net increased by $13.2 million during the three months ended March 30, 2025. The increase was primarily due to costs incurred related to incremental marketing and loyalty investments and expenses resulting from our bi-annual franchise operating conference held in the first quarter of 2025. The 2024 comparative period included lower equity compensation costs related to leadership changes during the first quarter of 2024.
Current wording
(a)Administrative and other general expenses, net increased by $17.9 million and $31.1 million, respectively, for the three and six months ended June 29, 2025. The increase for the three months ended June 29, 2025 was primarily due to $8.6 million of expenses incurred for incremental marketing investments and a $3.7 million increase from higher incentive compensation under our Management Incentive Plan as compared to prior year comparable period. The six months ended June 29, 2025 were also impacted by expenses resulting from our bi-annual franchise operating conference held in the first quarter of 2025 and lower comparative-period equity compensation costs related to leadership changes during the first quarter of 2024.
Previous wording
(d)Represents costs associated with project-based strategic initiatives that are not related to our ongoing operations.
Current wording
ii. Costs associated with project-based strategic initiatives that are not related to our ongoing operations, and;
Previous wording
Advertising funds expense was $44.3 million or 101.5% of advertising revenues for the three months ended March 30, 2025 as compared to $37.0 million or 99.8% of advertising revenues for the comparable prior period. Advertising funds expense is comprised primarily of expenses incurred by PJMF, which is designed to operate at break-even as it spends all annual contributions received from the system. The increase was primarily due to higher advertising spend resulting from the previously discussed increase in contributions to the national marketing fund. Advertising funds expense also contains expenses incurred through our international marketing funds to support our International business, which may lead to Advertising funds expense being less than or in excess of Advertising funds revenue due to timing differences.
Current wording
Advertising funds expenses were $44.0 million or 99.7% of advertising revenues and $88.4 million or 100.6% of advertising revenues for the three and six months ended June 29, 2025, respectively, as compared to $42.0 million or 100.0% of advertising revenues and $79.0 million or 99.9% of advertising revenues for the prior year comparable periods, respectively. Advertising funds expense is comprised primarily of expenses incurred by PJMF, which is designed to operate at break-even as it spends all annual contributions received from the system. The increase was primarily due to higher advertising spend resulting from the previously discussed increase in contributions to the national marketing fund. Advertising funds expense also contains expenses incurred through our international marketing funds to support our International business, which may lead to Advertising funds expense being less than or in excess of Advertising funds revenue due to timing differences.
Previous wording
We evaluate the performance of our reportable segments and allocate resources to them based on earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, and other, referred to as adjusted EBITDA. See “Note 11. Segment Information” for further information regarding the Company’s segments. Adjusted EBITDA for each of our reportable segments is summarized in the table below.
Current wording
We evaluate the performance of our reportable segments and allocate resources to them based on earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, and other adjustments, referred to as adjusted EBITDA. See “Note 11. Segment Information” for further information regarding the Company’s segments. Adjusted EBITDA for each of our reportable segments is summarized in the table below.
Previous wording
Domestic Company-owned restaurants decreased $9.9 million for the three months ended March 30, 2025 primarily due to a 4.6% decline in Domestic comparable sales as well as higher food costs and local advertising costs for our Domestic Company-owned restaurants, offset by decreases in insurance costs.
Current wording
Domestic Company-owned restaurants decreased $3.6 million for the three months ended June 29, 2025 primarily due to higher food and labor costs for our Domestic Company-owned restaurants during 2025. Domestic Company-owned restaurants decreased $13.5 million for the six months ended June 29, 2025 primarily due to higher food costs and local advertising costs. Results were also impacted by a 2.1% decline in comparable sales compared to the prior year period.
Previous wording
North America franchising decreased $1.3 million for the three months ended March 30, 2025 primarily due to higher incentive compensation allocated to the segment for the three months ended March 30, 2025 compared to the prior year period, partially offset by higher royalty and franchise fee revenue as discussed above.
Current wording
North America franchising decreased $0.4 million and $1.6 million for the three and six months ended June 29, 2025, respectively, primarily due to higher incentive compensation allocated to the segment compared to the prior year periods, partially offset by higher royalty and franchise fee revenue as discussed above.
Previous wording
North America commissaries increased $2.2 million for the three months ended March 30, 2025 primarily due to the annual increase in the commissary fixed operating margin mentioned above. This was offset by higher food costs, higher salaries and benefits, and increases in rent due to the sale and subsequent leaseback of two Domestic Quality Control Center properties (“QC Centers”) in Texas and Florida in the third quarter of 2024.
Current wording
North America commissaries increased $4.6 million and $6.8 million for the three and six months ended June 29, 2025, respectively, primarily due to higher prices mentioned previously. This was offset by higher food costs, higher salaries and benefits, and increases in rent due to the sale and subsequent leaseback of two Domestic QC Centers in Texas and Florida in the third quarter of 2024.
Previous wording
International increased $1.2 million for the three months ended March 30, 2025. The increase was primarily due to operating losses attributable to the UK Company-owned restaurants during the prior year quarter, when we owned and operated more restaurants in the UK. This was offset by increases in advertising costs in 2025.
Current wording
International increased $1.9 million and $3.1 million for the three and six months ended June 29, 2025, respectively. The increase was primarily due to operating losses attributable to the UK Company-owned restaurants during the prior year comparable periods, when we owned and operated more restaurants in the UK.
Previous wording
(a) Note that we have changed the signage of income tax expense from historic presentation for consistency purposes.
Current wording
(a) The signage of Income tax expense has been changed from the historic presentation for purposes of signage consistency with other expense items.
Previous wording
Net interest expense decreased $1.0 million for the three months ended March 30, 2025. The decrease for the three months ended March 30, 2025 was primarily due to lower average interest rates during the quarter.
Current wording
Net interest expense decreased $0.3 million and $1.3 million for the three and six months ended June 29, 2025, respectively. The decrease for the three and six months ended June 29, 2025 was primarily due to lower average interest rates during the respective periods.
Previous wording
Our effective income tax rate was 32.7% for three months ended March 30, 2025 as compared to an income tax rate of 34.2% for the prior year comparable period. The lower effective tax rate for three months ended March 30, 2025 was primarily driven by impairment charges related to the International Restructuring that created unrecognized tax losses and prevented the Company from generating foreign tax credits in 2024, partially offset by increased tax shortfall generated by stock option exercises and vesting of restricted shares in 2025 and increased foreign tax withholding on royalties.
Current wording
Our effective income tax rates were 30.5% and 31.6% for the three and six months ended June 29, 2025, respectively, as compared to an income tax rate of 27.7% and 31.3% for the prior year comparable periods, respectively. The higher effective tax rate for the three months ended June 29, 2025 was primarily due to lower pretax book income and tax shortfall generated by vesting of restricted shares in the second quarter of 2025. The effective tax rate was materially consistent between the six months ended June 29, 2025 and the prior year comparable period.
Previous wording
Net income included income of $0.1 million attributable to noncontrolling interests for three months ended March 30, 2025 as compared to income of $0.3 million for the prior year comparable period.
Current wording
Net income included income of $0.1 million and $0.3 million, respectively, attributable to noncontrolling interests for the three and six months ended June 29, 2025 as compared to income of $0.3 million and $0.6 million, respectively, for the prior year comparable periods.
Previous wording
Diluted earnings per common share was $0.27 for three months ended March 30, 2025 as compared to $0.44 for the prior year comparable period, representing an decrease of $0.17. Adjusted diluted earnings per common share, a non-GAAP measure, was $0.36 for three months ended March 30, 2025 as compared to adjusted diluted earnings per common share of $0.67 for the prior year comparable period representing a decrease of $0.31. See “Non-GAAP Measures” for additional information.
Current wording
Diluted earnings per common share were $0.28 and $0.56 for the three and six months ended June 29, 2025, respectively, as compared to $0.37 and $0.82 for the prior year comparable periods, respectively, representing a decrease of $0.09 and $0.26, respectively. Adjusted diluted earnings per common share, a non-GAAP measure, was $0.41 and $0.77 for the three and six months ended June 29, 2025, respectively, as compared to adjusted diluted earnings per common share of $0.61 and $1.28 for the prior year comparable periods, respectively, representing a decrease of $0.20 and $0.51, respectively. See “Non-GAAP Measures” for additional information.
Previous wording
(d)The tax effect on non-GAAP adjustments was calculated by applying the marginal tax rates of 22.7% and 22.6% for the three months ended March 30, 2025 and March 31, 2024, respectively.
Current wording
(c)The tax effect on non-GAAP adjustments was calculated by applying the marginal tax rates of 22.7% for the three and six months ended June 29, 2025 and 22.6% for the three and six months ended June 30, 2024.
Previous wording
Our primary sources of liquidity and capital resources are cash flows from operations and borrowings under the Second Amended and Restated Credit Agreement, dated as of March 26, 2025, which amended and restated the Amended and Restated Credit Agreement dated as of September 14, 2021 and amended May 30, 2023. The Second Amended and Restated Credit Agreement provides for a senior secured term loan in a principal amount of $200.0 million (the “Term Loan”) and a senior secured revolving credit facility in an aggregate available principal amount of $600.0 million (the “PJI Revolving Facility” together with the Term Loan, the “PJI Credit Facilities”). See “Note 8. Debt” for additional detail regarding the Second Amended and Restated Credit Agreement.
Current wording
Our primary sources of liquidity and capital resources are cash flows from operations and borrowings under the Second Amended and Restated Credit Agreement, dated as of March 26, 2025 (the “Second Amended and Restated Credit Agreement”), which amended and restated the Amended and Restated Credit Agreement dated as of September 14, 2021 and amended May 30, 2023. The Second Amended and Restated Credit Agreement provides for a senior secured term loan in a principal amount of $200.0 million (the “Term Loan”) and a senior secured revolving credit facility in an aggregate available principal amount of $600.0 million (the “PJI Revolving Facility” together with the Term Loan, the “PJI Credit Facilities”). See “Note 8. Debt” for additional detail regarding the Second Amended and Restated Credit Agreement.
Previous wording
The table below summarizes our cash flows for the three months ended March 30, 2025 and March 31, 2024 (in thousands):
Current wording
The table below summarizes our cash flows for the six months ended June 29, 2025 and June 30, 2024 (in thousands):
Previous wording
Total cash provided by operating activities was $31.3 million for the three months ended March 30, 2025 compared to $12.0 million for the corresponding period of 2024. The increase of $19.3 million primarily reflects a favorable impact from timing of collections and marketing spend within our advertising fund as well as favorable changes in working capital accounts compared to the prior period.
Current wording
Total cash provided by operating activities was $66.8 million for the six months ended June 29, 2025 compared to $42.0 million for the corresponding period of 2024. The increase of $24.9 million primarily reflects a favorable impact from timing of collections and marketing spend within our advertising fund as well as favorable changes in working capital accounts compared to the prior period.
Previous wording
Total cash used in investing activities was $7.1 million for the three months ended March 30, 2025 compared to $10.2 million for the same period in 2024. The decrease in cash used in investing activities is due primarily to the receipt of investment distributions of $4.7 million and $2.3 million during the three months ended March 30, 2025 and March 31, 2024, respectively, related to our deferred compensation plan.
Current wording
Total cash used in investing activities was $19.4 million for the six months ended June 29, 2025 compared to $23.8 million for the same period in 2024. The decrease in cash used in investing activities is due primarily to a $2.7 million year-over-year increase in repayments of notes issued and a $2.5 million year-over-year increase in investment distributions from our deferred compensation plan.
Previous wording
Our capital expenditures consisted primarily of capital investments for existing restaurants and new restaurant locations as well as investments in technology platforms. We estimate that our capital expenditures during 2025 will be approximately $75 million to $85 million. This estimate includes the acquisition of sites and construction costs for new Company-owned restaurants that have opened or that we expect to open during 2025. We intend to fund our capital expenditures with cash generated by operations and borrowings under our PJI Revolving Facility, as necessary.
Current wording
Our capital expenditures consisted primarily of capital investments for existing restaurants and new restaurant locations as well as investments in technology platforms. We estimate that our capital expenditures during 2025 will be approximately $75 million to $85 million, which primarily consists of the acquisition of sites and construction costs for new Company-owned restaurants that have opened or that we expect to open during 2025. This estimate also includes an estimated $8 million to $13 million of capital expenditures related to rebuilding tornado damage incurred at our Texas QC Center and Louisville restaurant support center and QC Center. These amounts are subject to change as repair and reconstruction work is ongoing, and we anticipate these amounts will be recovered under our insurance policy, subject to our policy deductibles. We intend to fund our capital expenditures with cash generated by operations and borrowings under our PJI Revolving Facility, as necessary.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
ii. Costs associated with project-based strategic initiatives that are not related to our ongoing operations, and;
Current report — wording carried from elsewhere
Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 for additional information regarding our cash requirements.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Company is in the final stages of executing the International Transformation Plan, expected to be completed during 2025, which has resulted in the following key accomplishments: