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Shares of Papa Johns dropped roughly 4% in premarket trading Thursday after the pizza chain fell short of Wall Street's first-quarter targets for both revenue and profit, hurt by a pullback in spending among U.S. customers.
For the quarter ended March 29, the company posted $478.6 million in revenue, a 7.7% drop year over year and below the $485.7 million consensus estimate, according to Reuters. On an adjusted basis, the chain earned $0.32 per diluted share, missing the $0.35 that analysts had anticipated.
Comparable sales in North America dropped 6.4%, marking three straight quarters of declines. Company-owned U.S. locations fell 5.2%, while franchised North American restaurants were down 6.7%. International comparable sales rose 3.6%, the sixth quarter in a row of growth outside North America.
Global system-wide restaurant sales were $1.20 billion, down 3% from the prior year first quarter. Net income was $6.9 million, compared with $9.3 million in the same period a year ago.
"In North America, results were in line with our expectations as we navigate the cautious consumer environment and promotional quick-service restaurant marketplace," CEO Todd Penegor said in a statement.
The company ended the quarter with 6,020 restaurants across 50 countries and territories. It opened 28 locations during the period — 8 in North America and 20 internationally — while closing 91, for a net system-wide decline of 63 restaurants.
Papa Johns maintained its full-year 2026 outlook, expecting North America comparable sales to fall by 2% to 4%, international comparable sales to rise by 2% to 4%, and adjusted EBITDA between $200 million and $210 million.
According to Reuters, McDonald's and Domino's were among the other fast-food operators that turned in softer sales figures for the quarter, each pointing to the strain that elevated living costs have placed on consumers.