Management turnover increases NT uncertainty; downgrade to Underperform

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Management turnover increases NT uncertainty; downgrade to Underperform

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Papa Johns International

Management turnover increases NT

uncertainty; downgrade to Underperform

Rating Change: UNDERPERFORM | PO: 34.00 USD | Price: 33.49 USD

CFO’s departure suggests rapid SSSG turn unlikely 13 July 2026

While former CFO Ravi Thanawala’s departure for AEO (covered by Lorraine Hutchinson) will Equity

allow him to return to his previous industry, we think it’s unlikely he would have left his post

after less than three years if he believed a sharp turnaround were imminent. In addition, the

Key Changesdisruption that comes with management turnover – particularly at a time when Papa John’s

is trying to execute a turnaround – may translate into less earnings predictability. (US$) Previous Current

Inv. Opinion C-2-7 C-3-7

Competitive intensity favors scale across channels Inv. Rating NEUTRAL UNDERPERFORM

PZZA posted negative 1Q26 SSSG despite easing compares (-9% 3-yr stack). Price Obj. 42.00 34.00

Outperformance by segment leader DPZ’s (domestic system sales of $10bb vs PZZA’s 2026E Rev (m) 1,890.6 1,882.6

$3.6bb) reflects the importance of scale -- particularly in challenging operating 2027E Rev (m) 1,784.7 1,778.5

environments – which translates into lower costs and better unit economics. Those in 2028E Rev (m) 1,698.7 1,694.5

turn fund investments in customer experience and enhanced value proposition. We 2026E EPS 1.87 1.65

estimate DPZ’s average co-op restaurant EBITDA at $200K vs $140K for PZZA. The gap 2027E EPS 1.80 1.54

in franchisee cash flow is likely proportionate. 2028E EPS 2.13 1.88

We lower SSSG and EBITDA estimates Sara Senatore

We believe the pizza segment’s competitive intensity stepped up further in 2Q26 and Research Analyst