Nine Negative Quarters Out of Ten
Papa John's release put North America comparable sales down 8.3%, with company-owned restaurants down 7.5% and franchised restaurants down 8.5%. International comparable sales fell 1.8%. Nation's Restaurant News noted that the system also posted -8.3% in the second quarter and that, outside Q2 2025, the chain has reported declines in nine of the past ten quarters.
Total revenue fell 10.5% to $454.8 million, which the company attributed partly to 113 restaurants refranchised since last year. StockStory said the market expected a 9.5% decline, so revenue came in slightly under that bar. Adjusted EBITDA fell to $38.1 million from $47.8 million, and adjusted diluted EPS was $0.16, half the $0.32 of a year earlier.
An EBITDA Target Now Below the Old Floor
The company updated its 2026 outlook. North America comparable sales are now expected down about 8%, the weak end of the prior -6% to -8% range. Global system-wide sales are now seen down about 5% versus down 2% to 4%, and international comps are now flat to up 1% versus up 1% to 3%. Adjusted EBITDA guidance moved to approximately $175 million, below the bottom of the previous $180 million to $190 million range.
Franchisees Pay More Locally, the Company Supports Their Margins
CEO Todd Penegor framed the quarter around a new plan called Unbox Better. Per Nation's Restaurant News, franchisees approved moving the national ad fund contribution to 5% from 6% and raising local marketing to 2% from 0%, with 98.5% of the system voting in favor. The company is adding 100 basis points of commissary margin support and cutting tech fees by another 25 basis points, and it expects a new point-of-sale system to be fully deployed by the end of 2027. Those are multi-year steps, so the near-term numbers investors can check next quarter are still comparable sales and EBITDA.
A 7.7% Gap Inside an 11.9% November Range
PZZA has monthly options only, so November 20 is the front expiration. At Wednesday's close, Cboe quoted the November 20 $20 call at $1.20 to $1.35 and the $20 put at $0.80 to $1.40. At midpoints that straddle cost about $2.38, roughly 11.9% of the $19.99 close, with break-evens near $17.63 and $22.38. Cboe's 30-day IV index read about 68%. At $18.45, the $20 put would hold about $1.55 of intrinsic value against the straddle's $2.38 cost, so the premarket move is smaller than what the options had priced.
Call Buyers Crowded the $20 Strike
Wednesday's volume was heavily tilted to calls, about 3,440 against 660 puts. The November 20 $20 call alone traded 1,803 contracts on top of open interest of 12,782, the largest position on the chain. If the stock opens near $18.45, that strike sits about 8% out of the money with two weeks left, and the post-earnings drop in implied volatility works against holders of short-dated calls. Thin quotes, like the 60-cent-wide spread on the $20 put, can make midpoints a poor guide to real fills. Our implied volatility guide explains post-earnings IV behavior, and the OCC options disclosure document covers the risks of standardized options.
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*By the OptionsPilot Editorial Team. Published November 5, 2026, 4:19 AM PT. This article is for education only and is not investment advice. Options involve risk and are not suitable for all investors.*
