Papa John’s: Pizza remains cold; maintain Underweight

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Papa John’s: Pizza remains cold; maintain Underweight

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Papa John’s

Pizza remains cold; maintain Underweight

Company Update

Difficult operating environment for pizza 08 July 2026

We maintain our Underweight on the PZZA 3.875s as the yield-to-worst of 5.3% is 200 High Yield Credit

bps inside of the Single B Index at 7.3%. Consumer preferences have shifted towards United States

higher protein options and competition in pizza is fierce. We expect this is likely to result Restaurants

in a persistent decline in comparable sales. In addition, the company has been unable to

William M. Reuter

stimulate demand with increased marketing and new product introductions have been Research Analyst

insubstantial. Absent an acquisition, which would trigger a change of control and BofAS +1 646 855 6363

redemption of the notes at a price below $101, yields do not accurately reflect risks. william.m.reuter@bofa.com

Michael DeRienzo

Research AnalystSales remained weak in 1Q26 BofAS

1Q26 Adj EBITDA decreased 4% to $48 million largely due to weak comparable sales, +1 646 855 7973

partially offset by lower G&A costs. Revenue declined 8% to $479 million with a 4% michael.derienzo@bofa.com

decrease in total comparable revenue. Comparable sales by region: North America -6%

and International +4%. The company ended the quarter with $781 million of debt and Papa John’s (PZZA)

$39 million of cash, leaving net leverage at 3.7x. Key Data 1Q2025A 1Q2026A LTM

Operating (US$ mm)

Domestic performance to remain soft Revenues 518 479 2,014

The company affirmed its FY26 guidance, including: (1) system-wide sales to decrease Adj EBITDA 50 48 199

by a low-single digit percentage to flat; (2) North America comparable sales -4% to -2%; CF from ops 31 7 102