Papa John's hits 14-year low after sales shrink again, company cuts 2026 outlook

Shares of Papa John’s International plunged more than 17% on Thursday to a 14-year low. The company reported a decline in quarterly revenue, lowered its 2026 outlook, suspended its dividend, and abandoned plans to sell the business.

Papa John’s, which has been struggling for several years, fell more than 17% on the Nasdaq on Thursday to $24.60 per share. That was the stock's lowest level since June 2012.

The company said its global revenue in the second quarter declined around 9% year over year to $482.4 million. Comparable sales in North America fell 8.3%, versus the roughly 7.0% decline expected by Wall Street, Bloomberg noted.

The decline was “driven by the softer consumer environment, lower order volumes, and a highly promotional QSR marketplace,” CEO Todd Penegor said in the press release.

As a result, Papa John’s lowered its outlook for full-year 2026. The pizza chain now expects comparable sales in North America to decline 6-8%, versus its previous forecast for a 2-4% drop.

“While our transformation is taking longer than anticipated,” Penegor acknowledged. To accelerate it, Papa John’s plans to invest more in attracting new customers and improving restaurant economics. To fund those investments, the board decided to suspend the quarterly dividend, according to the press release.

But that was not the main source of investors’ disappointment, writes Motley Fool contributor Rich Smith. Since 2025, Qatari-backed investment firm Irth Capital Management has viewed Papa John’s as a potential takeover target, and investors had hoped to receive a sizable premium if a deal went through. On Thursday, the management of the pizza chain dashed those hopes, saying Papa John’s had decided to remain independent and attempt to turn the business around on its own, Smith wrote.

In mid-July, BofA downgraded Papa John’s stock and advised investors to sell it. One reason for the downgrade was Ravi Thanawala’s departure as the pizza chain’s CFO on June 30.

“While former CFO Ravi Thanawala’s departure for AEO will 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,” BofA explained. It believes that “the disruption 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.”

According to MarketWatch data, Wall Street is broadly taking a wait-and-see approach on Papa John’s. The name has 10 “hold” ratings, six “buy” calls, and one “sell” recommendation. The average target price is $37 per share, implying 50% upside from the last close.

Papa John’s troubles began in 2017, when founder John Schnatter became embroiled in a racism controversy after using a racial slur during a conference call. The company’s legal dispute with Schnatter lasted around two years and ended with him stepping down from all leadership roles. Around the same time, in 2019, activist investor Starboard Value took a stake in Papa John’s, helping stabilize the company’s finances.

But its difficulties did not end there. After the pizza-delivery boom during the pandemic, pizza sales began to decline. According to data as of January, pizza chains were losing ground to the broader fast-food market. The trend has contributed to falling comparable sales at Papa John’s, the closure of U.S. restaurants, menu streamlining, and job cuts. All of this has unfolded against the backdrop of reports that Qatari-backed investment firm Irth Capital is interested in Papa John’s. The firm submitted two takeover proposals in 2025-2026, neither of which the company accepted.