PAPA JOHNS INTERNATIONAL INC 10-Q

Item 1. Financial Statements Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except per share amounts) June 28, 2026 December 28, 2025 (Unaudited) Assets Current assets: Cash, cash equivalents, and restricted cash $ 28,490 $ 36,950 Accounts receivable, net 94,512 103,068 Notes receivable, current portion 1,630 3,387 Income tax receivable 1,566 6,189 Inventories 32,546 34,336 Prepaid expenses and other current assets 65,116 48,895 Assets held for sale 10,503 4,607 Total current assets 234,363 237,432 Property and equipment, net 241,707 251,312 Finance lease right-of-use assets, net 35,842 39,039 Operating lease right-of-use assets, net 152,826 161,606 Notes receivable, less current portion, net 4,068 3,262 Goodwill 64,799 67,576 Other assets 71,426 77,281 Total assets $ 805,031 $ 837,508 Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit Current liabilities: Accounts payable $ 67,947 $ 61,218 Income and other taxes payable 8,807 8,941 Accrued expenses and other current liabilities 149,365 169,015 Current deferred revenue 8,927 13,096 Current finance lease liabilities 10,101 9,999 Current operating lease liabilities 22,813 23,725 Current portion of long-term debt 12,270 4,997 Liabilities held for sale 2,614 — Total current liabilities 282,844 290,991 Deferred revenue 17,493 19,294 Long-term finance lease liabilities 27,711 30,804 Long-term operating lease liabilities 147,407 156,405 Long-term debt, less current portion, net 715,218 710,436 Other long-term liabilities 55,571 62,264 Total liabilities 1,246,244 1,270,194 Redeemable noncontrolling interests 1,061 980 Stockholders’ deficit: Common stock ($ 0.01 par value per share; issued 49,303 at June 28, 2026 and 49,303 at December 28, 2025) 493 493 Additional paid-in capital 455,708 457,112 Accumulated other comprehensive loss ( 5,717 ) ( 6,452 ) Retained earnings 195,297 210,763 Treasury stock ( 16,385 shares at June 28, 2026 and 16,502 shares at December 28, 2025, at cost) ( 1,098,835 ) ( 1,106,666 ) Total stockholders’ deficit ( 453,054 ) ( 444,750 ) Noncontrolling interests in subsidiaries 10,780 11,084 Total Stockholders’ deficit ( 442,274 ) ( 433,666 ) Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit $ 805,031 $ 837,508 See accompanying notes. 1 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended (In thousands, except per share amounts) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Revenues: Company-owned restaurant sales $ 142,182 $ 178,989 $ 285,316 $ 352,870 Franchise royalties and fees 46,585 48,302 94,163 96,358 Commissary revenues 230,818 234,576 453,459 463,517 Other revenues 21,459 23,136 43,247 46,893 Advertising funds revenue 41,353 44,163 84,821 87,837 Total revenues 482,397 529,166 961,006 1,047,475 Costs and expenses: Cost of sales 339,025 371,716 679,917 738,212 General and administrative expenses 58,954 70,118 114,950 135,285 Depreciation and amortization 19,248 18,819 36,977 37,162 Advertising funds expense 41,983 44,023 85,217 88,361 Total costs and expenses 459,210 504,676 917,061 999,020 Operating income 23,187 24,490 43,945 48,455 Net interest expense ( 9,516 ) ( 10,584 ) ( 19,199 ) ( 20,663 ) Income before income taxes 13,671 13,906 24,746 27,792 Income tax expense ( 4,971 ) ( 4,235 ) ( 9,108 ) ( 8,778 ) Net income 8,700 9,671 15,638 19,014 Net (income) loss attributable to noncontrolling interests ( 167 ) ( 140 ) 150 ( 261 ) Net income attributable to the Company $ 8,533 $ 9,531 $ 15,788 $ 18,753 Net income attributable to common shareholders $ 8,104 $ 9,267 $ 15,063 $ 18,295 Basic earnings per common share $ 0.25 $ 0.28 $ 0.46 $ 0.56 Diluted earnings per common share $ 0.24 $ 0.28 $ 0.46 $ 0.56 Basic weighted average common shares outstanding 33,024 32,849 32,980 32,808 Diluted weighted average common shares outstanding 33,129 32,969 33,069 32,932 See accompanying notes. 2 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended Six Months Ended (In thousands) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net income $ 8,700 $ 9,671 $ 15,638 $ 19,014 Other comprehensive income (loss), before tax: Foreign currency translation adjustments ( 106 ) 2,530 ( 483 ) 3,628 Interest rate swaps (a) 413 ( 555 ) 1,306 ( 463 ) Other comprehensive income (loss), before tax 307 1,975 823 3,165 Income tax effect: Foreign currency translation adjustments 25 ( 528 ) 215 ( 781 ) Interest rate swaps (b) ( 96 ) 126 ( 303 ) 105 Income tax effect ( 71 ) ( 402 ) ( 88 ) ( 676 ) Other comprehensive income (loss), net of tax 236 1,573 735 2,489 Comprehensive income before attribution to noncontrolling interests 8,936 11,244 16,373 21,503 Less: comprehensive (income) loss, redeemable noncontrolling interests ( 72 ) ( 22 ) ( 137 ) ( 52 ) Less: comprehensive (income) loss, nonredeemable noncontrolling interests ( 95 ) ( 118 ) 287 ( 209 ) Comprehensive income attributable to the Company $ 8,769 $ 11,104 $ 16,523 $ 21,242 ___________________________________ (a) Amounts reclassified out of accumulated other comprehensive loss into net interest expense include $ 13 and $ 35 for the three and six months ended June 28, 2026, respectively and $ 14 and $( 41 ) for the three and six months ended June 29, 2025, respectively. (b) The income tax benefit (expense) effects of amounts reclassified out of accumulated other comprehensive loss were $( 3 ) and $( 8 ) for the three and six months ended June 28, 2026 and $( 4 ) and $ 9 for the three and six months ended June 29, 2025, respectively. See accompanying notes. 3 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited) Papa John’s International, Inc. (In thousands) Common Stock Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss (b) Retained Earnings Treasury Stock Noncontrolling Interests in Subsidiaries Total Stockholders’ Deficit For the three months ended June 28, 2026 Balance at March 29, 2026 32,898 $ 493 $ 453,945 $ ( 5,953 ) $ 202,601 $ ( 1,100,206 ) $ 10,685 $ ( 438,435 ) Net income (loss) (a) — — — — 8,533 — 95 8,628 Other comprehensive income (loss), net of tax — — — 236 — — — 236 Dividends on common stock ($ 0.46 per share) — — 16 — ( 15,837 ) — — ( 15,821 ) Exercise of stock options — — — — — — — — Stock-based compensation expense — — 3,057 — — — — 3,057 Issuance of restricted stock 22 — ( 1,068 ) — — 1,070 — 2 Tax effect of restricted stock awards ( 7 ) — ( 205 ) — — — — ( 205 ) Distributions to noncontrolling interests — — — — — — — — Other 5 — ( 37 ) — — 301 — 264 Balance at June 28, 2026 32,918 $ 493 $ 455,708 $ ( 5,717 ) $ 195,297 $ ( 1,098,835 ) $ 10,780 $ ( 442,274 ) For the six months ended June 28, 2026 Balance at December 28, 2025 32,801 $ 493 $ 457,112 $ ( 6,452 ) $ 210,763 $ ( 1,106,666 ) $ 11,084 $ ( 433,666 ) Net income (loss) (a) — — — — 15,788 — ( 287 ) 15,501 Other comprehensive income (loss), net of tax — — — 735 — — — 735 Dividends on common stock ($ 0.92 per share) — — 34 — ( 31,254 ) — — ( 31,220 ) Exercise of stock options — — — — — — — — Stock-based compensation expense — — 7,466 — — — — 7,466 Issuance of restricted stock 152 — ( 6,881 ) — — 6,883 — 2 Tax effect of restricted stock awards ( 50 ) — ( 1,584 ) — — — — ( 1,584 ) Distributions to noncontrolling interests — — — — — — ( 17 ) ( 17 ) Other 15 — ( 439 ) — — 948 — 509 Balance at June 28, 2026 32,918 $ 493 $ 455,708 $ ( 5,717 ) $ 195,297 $ ( 1,098,835 ) $ 10,780 $ ( 442,274 ) (a) Net income to the Company for the three and six months ended June 28, 2026 excludes $ 72 and $ 137 allocable to the redeemable noncontrolling interests for our joint venture arrangements. (b) At June 28, 2026, the accumulated other comprehensive loss of $ 5,717 was comprised of net unrealized foreign currency translation loss of $ 6,096 and net unrealized gain on the interest rate swap agreements of $ 379 . See accompanying notes. 4 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (continued) (Unaudited) Papa John’s International, Inc. (In thousands) Common Stock Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss (b) Retained Earnings Treasury Stock Noncontrolling Interests in Subsidiaries Total Stockholders’ Deficit For the three months ended June 29, 2025 Balance at March 30, 2025 32,728 $ 493 $ 449,625 $ ( 7,540 ) $ 235,794 $ ( 1,110,306 ) $ 15,125 $ ( 416,809 ) Net income (loss) (a) — — — — 9,531 — 118 9,649 Other comprehensive income (loss), net of tax — — — 1,573 — — — 1,573 Dividends on common stock ($ 0.46 per share) — — 24 — ( 15,457 ) — — ( 15,433 ) Exercise of stock options 9 — 397 — — — — 397 Stock-based compensation expense — — 3,824 — — — — 3,824 Issuance of restricted stock 7 — ( 391 ) — — 376 — ( 15 ) Tax effect of restricted stock awards ( 3 ) — ( 88 ) — — — — ( 88 ) Distributions to noncontrolling interests — — — — — — — — Other 12 — ( 604 ) — — 752 — 148 Balance at June 29, 2025 32,753 $ 493 $ 452,787 $ ( 5,967 ) $ 229,868 $ ( 1,109,178 ) $ 15,243 $ ( 416,754 ) For the six months ended June 29, 2025 Balance at December 29, 2024 32,646 $ 493 $ 452,449 $ ( 8,456 ) $ 241,717 $ ( 1,115,729 ) $ 15,310 $ ( 414,216 ) Net income (loss) (a) — — — — 18,753 — 209 18,962 Other comprehensive income (loss), net of tax — — — 2,489 — — — 2,489 Dividends on common stock ($ 0.92 per share) — — 53 — ( 30,602 ) — — ( 30,549 ) Exercise of stock options 9 — 397 — — — — 397 Stock-based compensation expense — — 7,493 — — — — 7,493 Issuance of restricted stock 110 — ( 5,606 ) — — 5,591 — ( 15 ) Tax effect of restricted stock awards ( 27 ) — ( 1,208 ) — — — — ( 1,208 ) Distributions to noncontrolling interests — — — — — — ( 276 ) ( 276 ) Other 15 — ( 791 ) — — 960 — 169 Balance at June 29, 2025 32,753 $ 493 $ 452,787 $ ( 5,967 ) $ 229,868 $ ( 1,109,178 ) $ 15,243 $ ( 416,754 ) (a) Net income to the Company for the three and six months ended June 29, 2025 excludes $ 22 and $ 52 allocable to the redeemable noncontrolling interests for our joint venture arrangements. (b) At June 29, 2025, the accumulated other comprehensive loss of $ 5,967 was comprised of net unrealized foreign currency translation loss of $ 5,485 and net unrealized loss on the interest rate swap agreements of $ 482 . See accompanying notes. 5 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended (In thousands) June 28, 2026 June 29, 2025 Operating activities Net income $ 15,638 $ 19,014 Adjustments to reconcile net income to net cash provided by operating activities: Provision for allowance for credit losses on accounts and notes receivable 3,652 3,284 Depreciation and amortization 36,977 37,162 Deferred income taxes 664 1,600 Stock-based compensation expense 7,466 7,493 Refranchising and impairment (gain) loss ( 1,035 ) 1,693 Loss on disposal of property and equipment 729 2,576 Other 1,490 237 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable 3,717 1,082 Income tax receivable 4,624 ( 308 ) Inventories 1,567 ( 1,980 ) Prepaid expenses and other current assets ( 4,651 ) ( 3,693 ) Other assets and liabilities ( 5,796 ) ( 3,160 ) Accounts payable 6,657 12,609 Income and other taxes payable ( 116 ) ( 6,132 ) Accrued expenses and other current liabilities ( 20,686 ) ( 9,315 ) Deferred revenue ( 5,961 ) ( 3,812 ) Advertising fund assets and liabilities ( 9,108 ) 8,493 Net cash provided by operating activities 35,828 66,843 Investing activities Purchases of property and equipment ( 26,356 ) ( 30,305 ) Purchases of property and equipment related to damages from natural disasters ( 1,221 ) ( 1,366 ) Insurance proceeds related to damages from natural disasters 850 2,900 Repayments of notes issued 1,256 4,534 Proceeds from dispositions and refranchising, net of cash transferred 4,295 — Proceeds from investments 3,232 4,739 Other — 109 Net cash used in investing activities ( 17,944 ) ( 19,389 ) Financing activities Net proceeds (repayments) of revolving credit facilities 11,259 ( 212,927 ) Proceeds from term loan — 200,000 Debt issuance costs — ( 3,223 ) Proceeds from exercise of stock options — 397 Dividends paid to common stockholders ( 30,864 ) ( 30,493 ) Tax payments for equity award issuances ( 1,584 ) ( 1,208 ) Distributions to noncontrolling interests ( 73 ) ( 339 ) Principal payments on finance leases ( 5,117 ) ( 4,903 ) Other 231 ( 55 ) Net cash used in financing activities ( 26,148 ) ( 52,751 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 196 ) 641 Change in cash, cash equivalents, and restricted cash ( 8,460 ) ( 4,656 ) Cash, cash equivalents, and restricted cash at beginning of period 36,950 37,955 Cash, cash equivalents, and restricted cash at end of period $ 28,490 $ 33,299 See accompanying notes. 6 Papa John’s International, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) June 28, 2026 1. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP” or “U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 28, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 27, 2026. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Annual Report on Form 10-K for Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) for the year ended December 28, 2025. In discussions of our business, “Domestic” is defined as within the contiguous United States, “North America” includes Domestic and Canada, and “International” includes the rest of the world other than North America. 2. Significant Accounting Policies Principles of Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of Papa John’s International, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. Certain prior year amounts herein have been reclassified to conform to the current year presentation. Variable Interest Entity Papa Johns Domestic restaurants, both Company-owned and franchised, participate in Papa John’s Marketing Fund, Inc. (“PJMF”), a nonstock corporation designed to operate at break-even as it spends all annual contributions received from the system. PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs. PJMF is a variable interest entity (“VIE”) that funds its operations with ongoing financial support and contributions from the Domestic restaurants, of which approximately 87 percent are franchised, and does not have sufficient equity to fund its operations without these ongoing financial contributions. Based on an assessment of the governance structure and operating procedures of PJMF, the Company determined it has the power to control certain significant activities of PJMF, and therefore, is the primary beneficiary. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant items that are subject to such estimates and assumptions include the allowance for credit losses on accounts and notes receivable, property and equipment, net and impairment of long-lived assets, and insurance reserves. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. Noncontrolling Interests Papa Johns has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 13 and 98 restaurants at June 28, 2026 and June 29, 2025, respectively. Consolidated net income is required to be reported separately at amounts attributable to both the Company and the noncontrolling interests held by third parties. 7 Net income (loss) attributable to these joint ventures for the three and six months ended June 28, 2026 and June 29, 2025 was as follows: Three Months Ended Six Months Ended (In thousands) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Papa John’s International, Inc. $ 391 $ 327 $ ( 344 ) $ 602 Redeemable noncontrolling interests 72 22 137 52 Nonredeemable noncontrolling interests 95 118 ( 287 ) 209 Total net income (loss) $ 558 $ 467 $ ( 494 ) $ 863 The following summarizes the redemption feature, location and related accounting within the Condensed Consolidated Balance Sheets for these joint venture arrangements: Type of Joint Venture Arrangement Location within the Condensed Consolidated Balance Sheets Recorded Value Joint ventures with no redemption feature Permanent equity Carrying value Joint ventures with option to require the Company to purchase the noncontrolling interest - not currently redeemable or redemption not probable Temporary equity Carrying value Deferred Income Tax Accounts and Tax Reserves We are subject to income taxes in the United States and several foreign jurisdictions. Management judgment is required in determining the provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable and those deferred. We use an estimated annual effective rate based on expected annual income to determine our quarterly provision for income taxes. The effective income tax rate includes the estimated domestic state effective income tax rate and applicable foreign income tax rates. The effective income tax rate is also impacted by various permanent items and credits, net of any related valuation allowances, and can vary based on changes in estimated annual income. Discrete items are recorded in the quarter in which they occur. Our effective income tax rate was 36.4 % and 36.8 % for the three and six months ended June 28, 2026, respectively, as compared to 30.5 % and 31.6 % for the prior year comparable periods, respectively. The higher effective tax rates during the three and six months ended June 28, 2026 were primarily due to a shift in income between jurisdictions, tax shortfall generated by vesting of restricted shares, and lower projected income tax credits. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets and liabilities are netted by tax jurisdiction. Deferred tax assets are also recognized for the estimated future effects of tax attribute carryforwards (e.g., net operating losses, capital losses, and foreign tax credits). The effect on deferred taxes due to changes in tax rates is recognized in the period in which the new tax rate is enacted. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts we expect to realize. Deferred tax assets and liabilities are recorded within Other assets and Other long-term liabilities on the Condensed Consolidated Balance Sheets. Tax authorities periodically audit the Company. We record reserves and related interest and penalties for identified exposures as income tax expense. We evaluate these issues on a quarterly basis to adjust for events, such as statute of limitations expirations, court rulings or audit settlements, which may impact our ultimate payment for such exposures. Fair Value Measurements and Disclosures The Company determines the fair value of financial assets and liabilities based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. Certain assets and liabilities are measured at fair value on a recurring basis and are required to be classified and disclosed in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data. 8 Fair value is a market-based measurement, not an entity-specific measurement. Considerable judgment is required to interpret market data to estimate fair value; accordingly, the fair values presented do not necessarily indicate what the Company or its debtholders could realize in a current market exchange. Our financial assets and liabilities that were measured at fair value on a recurring basis as of June 28, 2026 and December 28, 2025 are as follows: Fair Value Measurements (In thousands) Carrying Value Level 1 Level 2 Level 3 June 28, 2026 Financial assets: Cash surrender value of life insurance policies (a) $ 27,757 $ 27,757 $ — $ — Interest rate swaps (b) $ 499 $ — $ 499 $ — December 28, 2025 Financial assets: Cash surrender value of life insurance policies (a) $ 29,432 $ 29,432 $ — $ — Financial liabilities: Interest rate swaps (b) $ 807 $ — $ 807 $ — ___________________________________ (a) Represents life insurance policies held in our non-qualified deferred compensation plan, which are classified as Other assets on the Condensed Consolidated Balance Sheets (b) The fair value of our interest rate swaps is based on the sum of all future net present value cash flows. The future cash flows are derived based on the terms of our interest rate swaps, as well as considering published discount factors, and projected Secured Overnight Financing Rates (“SOFR”). See “Note 8. Debt” for further discussion. There were no transfers among levels within the fair value hierarchy during the three and six months ended June 28, 2026 or fiscal year 2025. The fair value of certain assets and liabilities approximates carrying value because of the short-term nature of the accounts, including cash and cash equivalents, accounts receivable, net of allowances, and accounts payable. The carrying value of notes receivable, net of allowances, also approximates fair value. The Company’s revolving credit facilities and term loan borrowings under the Company’s credit agreement approximate carrying value due to their variable market-based interest rate. The Company’s 3.875 % senior notes are classified as a Level 2 fair value measurement since the Company estimates the fair value by using recent trading transactions, and have the following estimated fair values and carrying values (excluding the impact of unamortized debt issuance costs) as of June 28, 2026 and December 28, 2025: June 28, 2026 December 28, 2025 (In thousands) Carrying Value Fair Value Carrying Value Fair Value 3.875 % Senior Notes $ 400,000 $ 383,100 $ 400,000 $ 380,000 Allowance for Credit Losses Estimates of expected credit losses, even if remote, are based upon historical account write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends of select operating metrics, and macroeconomic factors. Credit quality is monitored through the timing of payments compared to the prescribed payment terms and known facts regarding the financial condition of the franchisee or customer. Account and note balances are charged against the allowance after recovery efforts have ceased. 9 The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable: (In thousands) Accounts Receivable Notes Receivable Balance at December 28, 2025 $ 12,129 $ 17,777 Current period provision for expected credit losses, net 3,687 ( 35 ) Write-offs charged against the allowance ( 1,516 ) ( 575 ) Balance at June 28, 2026 $ 14,300 $ 17,167 Impairment of Long-lived Assets The Company evaluates its property and equipment and other long-lived assets for potential indicators of impairment at least annually, or as facts and circumstances arise that indicate the carrying value of the asset group may not be recoverable. For Domestic Company-owned restaurants, the evaluation is performed at the operating market level while International Company-owned restaurants are evaluated at the restaurant level as these respective levels represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If the carrying amount of the long-lived asset group exceeds the amount of estimated future undiscounted cash flows, the fair value of the asset group is estimated and an impairment loss is recorded if the carrying value exceeds the estimated fair value. The assumptions used in the undiscounted cash flow calculation related to future growth are subjective and may be negatively impacted by future changes in operating performance or economic conditions. In situations in which no impairment indicators are identified at the applicable asset‑group level, but certain assets within the asset group are expected to be used for a shorter period than previously estimated, the Company revises the remaining useful lives of those assets and prospectively records accelerated depreciation over the shortened period. During the three months ended June 28, 2026, we incurred approximately $ 0.9 million of accelerated depreciation expense, primarily related to the planned retirement of our current point-of-sale system and investments in our omnichannel experience, which required revisions to the useful lives of certain legacy technology assets. We also incurred $ 0.7 million of accelerated depreciation expense related to the closure or approved closure of 25 Company-owned restaurants under our Enterprise Transformation Plan (as defined and discussed in further detail in “Note 9. Restructuring”). Tornado Impact During the first quarter of 2025, a tornado caused real and personal property damage to the Company’s leased Quality Control Center (“QC Center”) in Grand Prairie, Texas. The Company recorded pre-tax expenses of $ 0.9 million during the six months ended June 29, 2025, related to these damages, which primarily reflect operating lease right-of-use asset impairment charges related to the leased property offset by expected property-related insurance proceeds. Additionally, during the second quarter of 2025, a tornado caused real and personal property damage to the Company’s restaurant support center and QC Center in Louisville, Kentucky. The Company recorded asset impairment charges of $ 2.7 million and incurred additional operating expenses of $ 1.5 million during the three months ended June 29, 2025, for which we recorded an anticipated insurance recovery as we believe such losses are probable of recovery under our insurance policy. Expenses incurred and the related anticipated insurance proceeds were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations. The Company received $ 1.0 million and $ 3.5 million of insurance proceeds related to the two incidents during the six months ended June 28, 2026 and June 29, 2025, respectively. For the six months ended June 28, 2026, $ 0.9 million of these proceeds were classified as cash inflows from investing activities and $ 0.1 million were classified as cash inflows from operating activities. For the six months ended June 29, 2025, $ 2.9 million of the proceeds were classified as cash inflows from investing activities and $ 0.6 million were classified as cash inflows from operating activities. These amounts were presented in the Condensed Consolidated Statements of Cash Flows based on the nature of the underlying losses and expected use of the proceeds. To the extent that proceeds received from our insurer in future periods exceed losses recognized in the financial statements, we may record income within our Condensed Consolidated Statements of 10 Operations once such insurance proceeds are realized or realizable. Neither of the tornadoes had a significant impact on our operations, as our other QC Centers were able to ensure that restaurants were adequately supplied. Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, “ Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The ASU includes required disclosures in the notes to the consolidated financial statements of specific information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the standard may be applied either prospectively or retrospectively. The Company is in the process of assessing the impact of the new standard, including an evaluation of the Company’s financial systems and availability of data to meet the requirements. In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. The ASU modernizes the accounting guidance for costs incurred to develop software for internal use by removing references to project stages of a software development project, which better aligns with current software development methods. Under the new standard, entities will commence capitalizing eligible costs when management has authorized and committed to funding the software project, and when it is probable that the project will be completed and the software will be used to perform the function intended. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. The guidance can be applied using a prospective, retrospective, or modified transition approach. The Company is currently evaluating the impact of this accounting standard to its consolidated financial statements. 3. Leases Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At June 28, 2026, we leased and subleased approximately 325 Papa Johns restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five to ten years . Rental income, primarily derived from properties leased and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms. The Company recognized total sublease income of $ 2.7 million and $ 5.5 million for the three and six months ended June 28, 2026, respectively, and $ 2.8 million and $ 5.4 million for the three and six months ended June 29, 2025, respectively, within Other revenues in the Condensed Consolidated Statements of Operations. Lease Guarantees As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of approximately 75 Domestic leases. These leases have varying terms, the latest of which expires in 2040. As of June 28, 2026, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was approximately $ 10.6 million. This contingent liability is not included in the Condensed Consolidated Balance Sheets as it is not probable to occur. The fair value of the guarantee is not material. 11 Supplemental Cash Flow & Other Information Supplemental cash flow information related to leases for the periods reported is as follows: Six Months Ended (In thousands) June 28, 2026 June 29, 2025 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,056 $ 1,107 Financing cash flows from finance leases 5,117 4,903 Operating cash flows from operating leases (a) 18,807 21,112 Right-of-use assets obtained in exchange for new finance lease liabilities 2,291 15,738 Right-of-use assets obtained in exchange for new operating lease liabilities 8,856 12,402 Cash received from sublease income 5,269 5,115 ___________________________________ (a) Included within the change in Other assets and liabilities within the Condensed Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion. 4. Papa John’s Marketing Fund, Inc. PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Contributions and expenditures are reported on a gross basis in the Condensed Consolidated Statements of Operations within Advertising funds revenue and Advertising funds expense, respectively. PJMF also has a wholly-owned subsidiary, Papa Card, Inc., which administers the Company’s gift card programs. The assets and liabilities of PJMF, which are utilized solely for the Company’s advertising and promotional programs, were as follows in the Condensed Consolidated Balance Sheets: (In thousands) June 28, 2026 December 28, 2025 Assets Current assets: Cash and cash equivalents $ 3,751 $ 7,759 Accounts receivable, net 14,198 15,077 Income tax receivable 310 275 Prepaid expenses and other current assets 15,399 3,278 Total current assets 33,658 26,389 Deferred income taxes 570 570 Other assets 80 106 Total assets $ 34,308 $ 27,065 Liabilities Current liabilities: Accrued expenses and other current liabilities $ 33,290 $ 31,082 Current portion of long-term debt 2,270 — Current deferred revenue 4,261 5,000 Total current liabilities 39,821 36,082 Deferred revenue 2,186 2,742 Total liabilities $ 42,007 $ 38,824 12 5. Revenue Recognition Contract Balances Our contract liabilities primarily relate to franchise fees, unredeemed gift card liabilities, and loyalty program obligations, which we classify within Current deferred revenue and Deferred revenue on the Condensed Consolidated Balance Sheets. The Company recognized deferred revenue of $ 7.6 million and $ 17.1 million during the three and six months ended June 28, 2026, respectively, and $ 7.9 million and $ 17.7 million during the three and six months ended June 29, 2025, respectively. The following table includes a breakout of contract liability balances: (In thousands) June 28, 2026 December 28, 2025 Change Unearned franchise fees and royalties $ 18,292 $ 19,678 $ ( 1,386 ) Unredeemed gift card liabilities 6,447 7,742 ( 1,295 ) Customer loyalty program obligations 1,681 4,970 ( 3,289 ) Total contract liabilities $ 26,420 $ 32,390 $ ( 5,970 ) Our contract assets consist primarily of equipment incentives provided to franchisees. Equipment incentives are related to the future value of commissary revenue the Company will receive over the term of the incentive agreement. Contract assets were approximately $ 15.1 million and $ 19.1 million at June 28, 2026 and December 28, 2025, respectively. Revenue was reduced by approximately $ 1.8 million and $ 3.5 million for the three and six months ended June 28, 2026, respectively, and approximately $ 1.9 million and $ 3.5 million for the three and six months ended June 29, 2025, respectively, for the amortization of contract assets over the applicable contract terms. Contract assets are included in Prepaid expenses and other current assets and Other assets on the Condensed Consolidated Balance Sheets. Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period: Performance Obligations by Period (In thousands) Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Unearned franchise fees and royalties $ 3,040 $ 2,712 $ 2,490 $ 2,284 $ 2,085 $ 2,981 $ 15,592 At June 28, 2026, approximately $ 2.7 million of area development fees related to unopened restaurants and International unearned franchise fees were included in Deferred revenue. Timing of revenue recognition is dependent upon the timing of restaurant openings and franchisees’ revenues. Unredeemed gift card liabilities, which are included in Deferred revenue, will be recognized in Company-owned restaurant sales when gift cards are redeemed. The Company will recognize redemption fee revenue in Other revenues when cards are redeemed at franchised restaurant locations. 6. Common Stock Shares Authorized and Outstanding The Company has authorized 100.0 million shares of common stock as of June 28, 2026 and December 28, 2025. The Company’s outstanding shares of common stock, net of repurchased shares of common stock held as treasury stock, were 32.9 million shares at June 28, 2026, compared to 32.8 million shares at December 28, 2025. Share Repurchase Program On October 28, 2021, our Board of Directors approved a share repurchase program with an indefinite duration for up to $ 425.0 million of the Company’s common stock. There was no share repurchase activity during the three and six months ended June 28, 2026 or June 29, 2025. Approximately $ 90.2 million remained available under the Company’s share repurchase program as of June 28, 2026. 13 The timing and volume of share repurchases under the Company’s share repurchase program may be executed at the discretion of management on an opportunistic basis, subject to market and business conditions, regulatory requirements and other factors, or pursuant to trading plans or other arrangements. Repurchases under the program may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, at times and in such amounts as management deems appropriate. Repurchases under the Company’s share repurchase program may be commenced or suspended from time to time at the Company’s discretion without prior notice. Funding for the share repurchase program will be provided through our credit facility, cash generated by operations and from asset sales, and cash and cash equivalents. Dividends Beginning with our third quarter dividend in August 2026, the Company’s Board of Directors voted to suspend the quarterly dividend. The declaration and payment of any future dividends will be at the discretion of our Board of Directors. The Company paid aggregate cash dividends of approximately $ 30.9 million ($ 0.92 per share) for the six months ended June 28, 2026. 7. Earnings per Share We compute earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. Time-based restricted stock awards are participating securities because holders of such unvested shares have rights to receive non-forfeitable dividends. Under the two-class method, total dividends provided to the holders of participating securities are subtracted from net income attributable to the Company to determine net income attributable to common shareholders. The Company may, at its sole discretion, require any dividends paid on the unvested restricted stock awards to be paid in shares rather than in cash, which could then be forfeited if the employee forfeits the underlying awards. Basic earnings per common share are computed by dividing net income attributable to common shareholders by the weighted-average common shares outstanding. Diluted earnings per common share are computed by dividing the net income attributable to common shareholders by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding consist of basic weighted average common shares outstanding plus weighted average awards outstanding under our equity compensation plans, which are dilutive securities. The calculations of basic and diluted earnings per common share are as follows: Three Months Ended Six Months Ended (In thousands, except per share data) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Calculation of net income attributable to common shareholders Net income attributable to the Company $ 8,533 $ 9,531 $ 15,788 $ 18,753 Dividends paid to participating securities ( 429 ) ( 264 ) ( 725 ) ( 458 ) Net income attributable to common shareholders $ 8,104 $ 9,267 $ 15,063 $ 18,295 Basic earnings per common share Basic weighted average common shares outstanding 33,024 32,849 32,980 32,808 Basic earnings per common share $ 0.25 $ 0.28 $ 0.46 $ 0.56 Diluted earnings per common share Weighted average common shares outstanding 33,024 32,849 32,980 32,808 Dilutive effect of outstanding equity awards (a) 105 120 89 124 Diluted weighted average common shares outstanding 33,129 32,969 33,069 32,932 Diluted earnings per common share $ 0.24 $ 0.28 $ 0.46 $ 0.56 ___________________________________ (a) Excludes 317,000 and 269,000 shares underlying equity awards for the three and six months ended June 28, 2026, respectively, and 294,000 and 257,000 shares underlying equity awards for the three and six months ended June 29, 2025, respectively, as the effect of including such awards would have been anti-dilutive. 14 8. Debt Long-term debt, net, consists of the following: (In thousands) June 28, 2026 December 28, 2025 Senior notes $ 400,000 $ 400,000 Term loan 200,000 200,000 Revolving facilities (a) 133,515 122,257 Outstanding debt $ 733,515 $ 722,257 Unamortized debt issuance costs ( 6,027 ) ( 6,824 ) Current portion of long-term debt ( 12,270 ) ( 4,997 ) Total long-term debt, net $ 715,218 $ 710,436 ___________________________________ (a) Revolving facilities as of June 28, 2026 includes $ 2.3 million outstanding under the PJMF Revolving Facility as defined and discussed below. Senior Notes On September 14, 2021, the Company issued $ 400.0 million of 3.875 % Senior Notes (the “Notes”) which mature on September 15, 2029. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year at a fixed interest rate of 3.875 % per annum. Refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2025 for further description of the provisions and covenant requirements under the Senior Notes. Term Loan and Revolving Facilities On March 26, 2025, the Company amended and restated the Amended and Restated Credit Agreement, dated as of September 14, 2021 and amended May 30, 2023 (together, the “Previous Credit Agreement”) pursuant to the Second Amended and Restated Credit Agreement dated as of March 26, 2025 (the “Second Amended and Restated Credit Agreement”). The Second Amended and Restated Credit Agreement provides for a senior secured term loan in a principal amount of $ 200.0 million (the “Term Loan”) and a senior secured revolving credit facility in an aggregate available principal amount of $ 600.0 million (the “PJI Revolving Facility” together with the Term Loan, the “PJI Credit Facilities”), of which up to $ 40.0 million is available as swingline loans and up to $ 80.0 million is available as letters of credit. The PJI Credit Facilities will mature on March 26, 2030 (the “Maturity Date”) with term loans amortizing in quarterly installments that commenced on June 30, 2026 in amounts as set forth in the Second Amended and Restated Credit Agreement and the unpaid balance maturing on the Maturity Date. The remaining availability under the PJI Revolving Facility was approximately $ 468.7 million as of June 28, 2026. PJMF Revolving Facility PJMF has a $ 30.0 million revolving line of credit (the “PJMF Revolving Facility”) pursuant to a Revolving Loan Agreement, dated September 30, 2015, and most recently amended on September 30, 2025. The PJMF Revolving Facility is secured by substantially all assets of PJMF. The PJMF Revolving F acility matures on September 30, 2026, but is subject to annual renewals. The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of a one month SOFR plus 1.975 %. As of June 28, 2026, the principal amount of debt outstanding under the PJMF Revolving Facility was approximately $ 2.3 million and was classified as Current portion of long-term debt in the Condensed Consolidated Balance Sheets. The PJMF operating results and the related debt outstanding do not impact the financial covenants under the Company’s Second Amended and Restated Credit Agreement. 15 Derivative Financial Instruments The Company has historically entered into interest rate swaps with the objective of mitigating the Company’s exposure to the impact of interest rate changes associated with our variable rate debt under the PJI Credit Facilities. As of June 28, 2026, we had the following interest rate swap agreements: Effective Dates Floating Rate Debt Fixed Rates April 29, 2025 through April 25, 2028 $ 50 million 3.49 % June 30, 2025 through June 30, 2028 $ 50 million 3.72 % We have designated the interest rate swaps as cash flow hedges and assess hedge effectiveness on a quarterly basis. The interest rate swaps are recorded at fair value at each reporting date, and any unrealized gains or losses are included in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and reclassified to Net interest expense in the Condensed Consolidated Statements of Operations in the same period or periods during which the hedged transaction affect earnings. The following table provides information on the location and amounts of our current swaps in the accompanying Condensed Consolidated Balance Sheets (in thousands): Interest Rate Swap Derivatives Balance Sheet Location Fair Value June 28, 2026 Fair Value December 28, 2025 Prepaid expenses and other current assets $ 272 $ — Other assets $ 227 $ — Accrued expenses and other current liabilities $ — $ 193 Other long-term liabilities $ — $ 614 The effect of derivative instruments on the accompanying Condensed Consolidated Financial Statements is as follows (in thousands): Derivatives - Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in AOCL on Derivative Location of (Loss) or Gain Reclassified from AOCL into Income Amount of (Loss) or Gain Reclassified from AOCL into Income Net Interest Expense on Condensed Consolidated Statements of Operations Interest rate swaps for the three months ended: June 28, 2026 $ 317 Interest expense $ 13 $ ( 9,516 ) June 29, 2025 $ ( 429 ) Interest expense $ 14 $ ( 10,584 ) Interest rate swaps for the six months ended: June 28, 2026 $ 1,003 Interest expense $ 35 $ ( 19,199 ) June 29, 2025 $ ( 358 ) Interest expense $ ( 41 ) $ ( 20,663 ) Net interest paid, including payments made or received under the swaps, was $ 5.1 million and $ 17.8 million for the three and six months ended June 28, 2026, respectively, and $ 5.6 million and $ 23.2 million for the three and six months ended June 29, 2025, respectively. 16 9. Restructuring Enterprise Transformation Plan In December 2025, the Company’s Board of Directors approved, and the Company commenced, the first phase of a new business transformation program (the “Enterprise Transformation Plan”) designed to improve organizational effectiveness, reduce overhead duplication and non-consumer-facing spending, and improve Domestic market and franchisee health. In February 2026, the Company’s Board of Directors approved the second phase of the Enterprise Transformation Plan, which focuses on optimizing our restaurant portfolio and improving restaurant-level profitability in the Domestic market. During the six months ended June 28, 2026, the Company closed 101 restaurants across North America as part of the ongoing assessment of our restaurant portfolio, of which eight were Company-owned. As of June 28, 2026, the Company had approved the closure of 17 additional Company-owned restaurants, most of which we expect to close by the end of 2026. We are continuing to evaluate our Domestic restaurant portfolio, which we anticipate will result in additional strategic restaurant closures and restructuring charges, although the amounts and nature of future expenses relating to any actions yet to be determined or approved by management or our Board of Directors are currently not estimable. In connection with the foregoing approved initiatives, the Company incurred restructuring related costs of $ 4.4 million and $ 8.7 million during the three and six months ended June 28, 2026, respectively, primarily related to professional services, accelerated depreciation expense and other costs associated with the closure or approved closure of restaurants mentioned above, and a loss on sale related to the completed sale of the building occupied by our former print and promotions business in Louisville, Kentucky which did not support our core operations. These costs were included primarily within General and administrative expenses in the Condensed Consolidated Statements of Operations and primarily within Unallocated corporate expenses. The following table summarizes restructuring costs related to the Enterprise Transformation Plan recorded for the three and six months ended June 28, 2026: Three Months Ended Six Months Ended (In thousands) June 28, 2026 June 28, 2026 Professional services and other related costs $ 3,072 $ 6,605 Accelerated depreciation expense 689 689 Loss on disposal of property and equipment — 631 Other closure related costs 365 365 Total Enterprise Transformation Plan costs $ 4,126 $ 8,290 Stock-based compensation expense 290 416 Total Enterprise Transformation Plan costs, including stock-based award expense $ 4,416 $ 8,706 The following table presents changes in the liabilities relating to approved initiatives, which are recorded in Accrued expenses and other current liabilities and Accounts payable in the Condensed Consolidated Balance Sheets: (In thousands) Employee termination costs Professional services and other related costs Total Balance as of December 28, 2025 $ 5,389 $ 1,380 $ 6,769 Charges — 6,605 6,605 Payments ( 3,025 ) ( 5,298 ) ( 8,323 ) Balance as of June 28, 2026 $ 2,364 $ 2,687 $ 5,051 The Company has incurred total restructuring related costs of $ 16.4 million since commencement of the Enterprise Transformation Plan. The Company expects to incur total restructuring related charges of approximately $ 24 million to $ 31 million (inclusive of the $ 16.4 million incurred since commencement) related to all currently approved actions under the Enterprise Transformation Plan, which we estimate will be recognized during 2026 and 2027 primarily within Unallocated corporate expenses. Actual charges incurred may differ from this estimate due to various factors. 17 International Transformation Plan In December 2023, the Company announced international transformation initiatives (the “International Transformation Plan”) designed to evolve our business structure to deliver an enhanced value proposition to our International customers and franchisees, ensure targeted investments and efficient resource management, and better position our largest markets, including the UK, for long-term profitable growth and brand strength. The Company completed its international transformation initiatives as of December 28, 2025. Since inception of the International Transformation Plan, the Company incurred total restructuring related costs of $ 34.4 million, all of which was recognized within General and administrative expenses in the Condensed Consolidated Statements of Operations within our International segment. During the three and six months ended June 29, 2025, the Company recorded total costs of $ 2.5 million and $ 4.6 million, respectively, related to the International Transformation Plan. These costs consisted primarily of professional services and other related costs and losses on franchisee notes receivable. No expenses were recorded during the three and six months ended June 28, 2026. 10. Litigation, Commitments and Contingencies Litigation The Company is involved in a number of lawsuits, claims, investigations and proceedings, including those specifically identified below, consisting of intellectual property, employment, consumer, commercial and other matters arising in the ordinary course of business. The Company has made accruals with respect to those matters for which a loss is determined to be probable and reasonably estimable. We review these provisions at least quarterly and adjust these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. In re Papa John’s Employee & Franchise Employee Antitrust Litigation is a putative class action filed in December 2018 in the United States District Court for the Western District of Kentucky. The suit alleges that the “no-poaching” provision previously contained in the Company’s franchise agreement constituted an unlawful agreement or conspiracy in restraint of trade and commerce in violation of Section 1 of the Sherman Antitrust Act. On April 14, 2022, the parties reached a settlement in principle to resolve the case. Pursuant to the terms of the proposed settlement, in exchange for the Company’s payment of a total aggregate settlement amount of $ 5.0 million and other non-monetary consideration, all claims in the action will be dismissed, the litigation will be terminated, and the Company will receive a release. The settlement amount was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations in 2022. The District Court granted preliminary approval of the proposed settlement on August 2, 2025, and the Company made an initial payment of $ 2.5 million on September 5, 2025 towards the settlement with $ 2.5 million remaining accrued within Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets as of June 28, 2026. The proposed settlement contains certain customary contingencies and is subject to final approval by the District Court. The Company continues to deny any liability or wrongdoing in this matter. Rivera v. JNE, et al. is a personal injury action arising from a 2021 automobile accident involving a delivery driver employed by one of the Company’s franchisees in the state of Florida. The Company’s franchisor entity, Papa John’s Franchising, LLC, is named as a defendant in the action under a theory of vicarious liability. In May 2026, a jury returned an adverse verdict on liability against the Company’s franchisor entity; however, no damages have been awarded, and a separate damages trial is currently expected to occur in 2027. The Company believes there are substantial grounds to challenge the verdict and intends to continue vigorously defending the matter. Due to the current procedural posture of the case, the absence of a damages award, and uncertainty regarding the application of franchisor-liability principles, the Company is unable to reasonably estimate the possible loss or range of loss at this time. The Company continues to deny liability or wrongdoing in this matter. Commitments In the first quarter of 2026, the Company entered into a multi-year agreement for point‑of‑sale and restaurant operations software services which will expire on December 23, 2034, with a one year extension option. The agreement includes deployment requirements that specify a minimum number of Company‑owned and franchised restaurants to be installed and activated on the software platform by November 30, 2026 and by November 30, 2027. The total estimated contractual commitment for software services is approximately $ 125 million to $ 140 million over the term of the agreement, contingent upon variable components such as the timing of the deployment schedule and associated contractual credits. 18 These amounts are expected to be largely recovered through technology fees charged to our franchisees over the term of the agreement. As of June 28, 2026, the Company had not incurred any amounts related to these provisions. Refer to Note 18 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2025 for additional information on our commitments and contingencies. 11. Divestitures Sale of Orlando Restaurants On June 13, 2026, the Company entered into an asset purchase agreement (the “Purchase Agreement”) to refranchise 28 Domestic Company-owned restaurants located in the Orlando metropolitan area. The total sale price for the restaurants was approximately $ 10.8 million, which does not include transaction costs and is subject to customary post-closing adjustments under the terms of the Purchase Agreement. The sale is expected to close during the third quarter of 2026, at which point the restaurants will convert to franchised locations. The assets and liabilities associated with the restaurants to be sold are classified as held for sale in the Condensed Consolidated Balance Sheets as of June 28, 2026. (In thousands) June 28, 2026 Current assets $ 183 Property and equipment, net 5,563 Operating lease right-of-use assets, net 2,287 Goodwill 2,397 Assets held for sale $ 10,430 Current deferred revenue $ 106 Current operating lease liabilities 743 Long-term operating lease liabilities 1,765 Liabilities held for sale $ 2,614 Upon closing of the sale, the Company currently expects to recognize an estimated pre-tax gain on sale between $ 1.0 million and $ 3.0 million, which is net of estimated transaction costs and subject to change based on settlement of certain post-closing adjustments. This estimate is preliminary and subject to change based on settlement of certain post-closing adjustments. 2025 Refranchising Transaction On November 24, 2025, the Company completed the refranchising of 85 Domestic Company-owned restaurants previously owned and operated by Colonel’s Limited, LLC, a consolidated joint venture, to Pie Investments, an existing third-party franchisee (“Buyer”), for total proceeds of $ 35.7 million. Colonel’s Limited, LLC also entered into a Master Service Agreement effective November 24, 2025 with the Buyer for the performance by the Buyer of certain management, supervisory, and administrative services with respect to any identified remaining restaurants for which the parties have not yet obtained landlord consent to transfer the leases pursuant to the Purchase Agreement (the “Retained Restaurants”). During the six months ended June 28, 2026, the parties obtained landlord consent to transfer three leases related to the Retained Restaurants, resulting in a gain of $ 1.0 million which was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations during the six months ended June 28, 2026. We expect to receive the remaining $ 0.4 million of proceeds from the sale upon completion of the lease assignment for the sole remaining Retained 19 Restaurant and resolution of certain post-closing adjustments. As of June 28, 2026, assets held for sale related to this restaurant totaled $ 0.1 million and are included in the Condensed Consolidated Balance Sheets. Refer to Note 21 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2025 for further description of the transaction. Sale of Print and Promotions Building On February 18, 2026, we finalized the sale of a building occupied by our former print and promotions business in Louisville, Kentucky and received net proceeds of $ 3.5 million, which were classified as investing activities within the Condensed Consolidated Statements of Cash Flows. We recognized a loss on sale of approximately $ 0.3 million during the six months ended June 28, 2026, which was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations. 20 12. Segment Information We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International operations. The Domestic Company-owned restaurants segment consists of the operations of all Domestic Company-owned restaurants and principally generates revenues from retail sales of pizza and other food and beverage products. The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and the collection of royalties from our franchisees located in the United States and Canada. The North America commissaries segment consists of the operations of our regional dough production and product distribution centers in the United States and Canada and derives its revenues principally from the sale and distribution of food and paper products to Domestic Company-owned and franchised restaurants in the United States and Canada. The International segment consists of distribution sales to franchised Papa Johns restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees, as well as the operations of all Company-owned restaurants located in the UK. International franchisees are defined as all franchise operations outside of the United States and Canada. Our reportable segments are distinct business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. Certain administrative and capital costs are allocated to each of our segments based upon predetermined rates or estimated resource usage. All other business units that do not meet the quantitative or qualitative thresholds for determining reportable segments, which are not operating segments, we refer to as “All Other”. These consist of operations that derive revenues from franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM evaluates performance of and allocates resources to our segments based on segment adjusted EBITDA. Segment adjusted EBITDA represents Net income before Net interest expense, Income tax expense, Depreciation and amortization, Stock-based compensation expense, and other adjustments that vary from period to period, including certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. During the annual budget and forecasting process, the CODM uses segment adjusted EBITDA to allocate resources (including employees, property, and financial or capital resources) to the segments. The CODM regularly reviews trends in segment adjusted EBITDA on at least a quarterly basis to evaluate the profitability of the segments and to make resource allocation decisions. When our CODM reviews balance sheet information, it is at a consolidated level. Segment Results The tables below present our operating results by segment. The significant expense categories and amounts presented in the tables below align with the segment-level information that is regularly provided to the CODM. A reconciliation to Company results is included in the following section. Three Months Ended June 28, 2026 (In thousands) Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 138,936 $ 33,037 $ 211,021 $ 45,040 $ 428,034 Intersegment revenues — 231 44,808 — 45,039 Segment revenue $ 138,936 $ 33,268 $ 255,829 $ 45,040 $ 473,073 Less segment expenses (a) : COS - Product Costs $ 43,840 $ — $ 172,865 $ 12,953 $ 229,658 COS - Salaries & Benefits 45,748 — 31,473 2,238 79,459 COS - Other (b,c) 33,747 — 20,181 8,645 62,573 General & Administrative 8,966 9,528 8,976 8,509 35,979 Other Segment Expenses (d) — — — 5,324 5,324 Segment adjusted EBITDA $ 6,635 $ 23,740 $ 22,334 $ 7,371 $ 60,080 21 Three Months Ended June 29, 2025 (In thousands) Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 175,797 $ 35,359 $ 214,846 $ 44,184 $ 470,186 Intersegment revenues — 1,244 52,813 — 54,057 Segment revenue $ 175,797 $ 36,603 $ 267,659 $ 44,184 $ 524,243 Less segment expenses (a) : COS - Product Costs $ 53,196 $ — $ 190,554 $ 13,073 $ 256,823 COS - Salaries & Benefits 57,203 — 30,061 1,964 89,228 COS - Other (b,c) 45,586 — 16,378 9,370 71,334 General & Administrative 9,948 9,760 11,014 9,282 40,004 Other Segment Expenses (d) — — — 4,858 4,858 Segment adjusted EBITDA $ 9,864 $ 26,843 $ 19,652 $ 5,637 $ 61,996 22 Six Months Ended June 28, 2026 (In thousands) Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 278,607 $ 67,490 $ 415,621 $ 88,267 $ 849,985 Intersegment revenues — 465 86,962 — 87,427 Segment revenue $ 278,607 $ 67,955 $ 502,583 $ 88,267 $ 937,412 Less segment expenses (a) : COS - Product Costs $ 85,817 $ — $ 346,638 $ 24,478 $ 456,933 COS - Salaries & Benefits 92,178 — 64,365 4,433 160,976 COS - Other (b,c) 68,436 — 39,283 16,877 124,596 General & Administrative 17,656 18,862 17,516 16,500 70,534 Other Segment Expenses (d) — — — 10,465 10,465 Segment adjusted EBITDA $ 14,520 $ 49,093 $ 34,781 $ 15,514 $ 113,908 Six Months Ended June 29, 2025 (In thousands) Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 346,592 $ 70,911 $ 427,765 $ 83,295 $ 928,563 Intersegment revenues — 2,503 104,271 — 106,774 Segment revenue $ 346,592 $ 73,414 $ 532,036 $ 83,295 $ 1,035,337 Less segment expenses (a) : COS - Product Costs $ 105,333 $ — $ 380,024 $ 24,220 $ 509,577 COS - Salaries & Benefits 115,180 — 60,043 3,531 178,754 COS - Other (b,c) 90,485 — 32,659 16,440 139,584 General & Administrative 20,698 19,323 20,306 18,126 78,453 Other Segment Expenses (d) — — — 9,959 9,959 Segment adjusted EBITDA $ 14,896 $ 54,091 $ 39,004 $ 11,019 $ 119,010 ___________________________________ (a) Segment expenses exclude depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows). (b) During the current year, the Company updated its internal cost allocation methodology for certain centrally incurred costs. As a result, a portion of costs previously allocated to the Domestic Company‑owned restaurants segment is now reflected within Unallocated corporate expenses and the North America commissaries segment. The change is prospective and does not affect total reported expenses. Prior period segment information has not been recast. For the three months ended June 28, 2026, this allocation methodology update resulted in a $ 2.1 million decrease in COS - Other for our Domestic Company-owned restaurants, a $ 0.6 million increase in COS - Other for our North America commissaries segment, and a $ 1.5 million increase in Unallocated corporate expenses as compared to the prior year comparable period. For the six months ended June 28, 2026, this allocation methodology update resulted in a $ 4.2 million decrease in COS - Other for our Domestic Company-owned restaurants, a $ 1.2 million increase in COS - Other for our North America commissaries segment, and a $ 3.0 million increase in Unallocated corporate expenses as compared to the prior year comparable period. (c) The segment expense category “COS - Other” includes delivery expenses, Company-owned restaurant advertising costs, occupancy costs, technology costs, aggregator fees, insurance, and other costs of sales. (d) Other Segment Expenses represent all operating expenses that are not included in the segment significant expense categories. Other Segment Expenses include advertising fund expenses and other operating expenses. 23 Reconciliation of Segment Results to Company Results The following table reconciles total revenue from our segments to total Company revenues and total adjusted EBITDA from our segments to Income before income taxes: Three Months Ended Six Months Ended (In thousands) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Total Segment revenue $ 473,073 $ 524,243 $ 937,412 $ 1,035,337 All Other Revenue (a) 65,558 73,761 135,942 148,092 Elimination of intersegment revenue ( 56,234 ) ( 68,838 ) ( 112,348 ) ( 135,954 ) Total revenues $ 482,397 $ 529,166 $ 961,006 $ 1,047,475 Three Months Ended Six Months Ended (In thousands) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Total Segment adjusted EBITDA $ 60,080 $ 61,996 $ 113,908 $ 119,010 All Other adjusted EBITDA (a) 2,940 9,233 6,973 19,397 Unallocated corporate expenses, adjusted (b) ( 10,301 ) ( 18,614 ) ( 20,399 ) ( 36,168 ) Other income/(expense) adjustments to reconcile to income before income taxes (c) ( 29,532 ) ( 28,125 ) ( 56,537 ) ( 53,784 ) Net interest expense ( 9,516 ) ( 10,584 ) ( 19,199 ) ( 20,663 ) Income before income taxes $ 13,671 $ 13,906 $ 24,746 $ 27,792 ___________________________________ (a) As noted in the commentary above, All Other revenue and All Other adjusted EBITDA is derived from business units that do not meet the quantitative or qualitative thresholds for determining reportable segments. These business units consist of operations that derive revenues from franchise contributions to marketing funds and from franchise contributions to information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our largest marketing fund is PJMF, which is designed to operate at break-even for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Technology-based franchisee fees are meant to offset the costs of building, operating, and depreciating technology that supports franchisee operations. As such, these fees may vary from period to period, as they are designed to operate near break-even over time when including the impact of depreciation. (b) Unallocated corporate expenses represent administrative fees incurred by the restaurant support centers, including information systems and related services, corporate salaries and bonuses, and other corporate costs. These expenses are adjusted for depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows). The decrease in Unallocated corporate expenses for the comparable periods primarily relates to a reduction in supplemental advertising costs and a decrease in management compensation. (c) Other (income)/expense adjustments represent depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. As such, management excludes these items from the evaluation of segment adjusted EBITDA. For the periods above, the adjustments include: 24 Three Months Ended Six Months Ended (In thousands) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Depreciation and amortization $ 19,248 $ 18,819 $ 36,977 $ 37,162 Stock-based compensation expense 3,057 3,824 7,466 7,493 Refranchising transaction expense (gain), net 45 — ( 808 ) — Restructuring costs 3,438 2,451 7,548 4,631 Other costs (a) 3,744 3,031 5,354 4,498 Other (income)/expense adjustments $ 29,532 $ 28,125 $ 56,537 $ 53,784 ___________________________________ (a) For the three and six months ended June 28, 2026, represents costs associated with project-based strategic initiatives that are not related to our ongoing operations. For the three and six months ended June 29, 2025, other costs is comprised of the following: i. Losses on disposal of equipment incurred in connection with the termination of a COVID-era program that pre-purchased store equipment due to supply chain challenges; ii. Costs associated with project-based strategic initiatives that are not related to our ongoing operations; and iii. Costs incurred, net of anticipated insurance recoveries, arising from tornadoes that damaged the Texas QC Center as well as the restaurant support center and QC Center in Louisville, Kentucky. 25 Disaggregation of Revenue Our segments earn revenue from both external and internal customers. No single external customer accounted for 10% or more of our total revenues. Our intersegment revenues primarily represent revenue earned by our QC Centers from the sale of food and paper products to our Company-owned restaurants and collection of technology fees and marketing fees from our Company-owned restaurants. We account for intercompany sales as if the sales were to third parties and subsequently eliminate the activity. The accounting policies of our segments are the same as those described in Note 2. Significant Accounting Policies. In the following tables, revenues are disaggregated by major product line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment to total revenues: Three Months Ended June 28, 2026 (In thousands) Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 138,936 $ — $ — $ 3,246 $ — $ — $ 142,182 Franchise royalties and fees — 33,268 — 13,548 — ( 231 ) 46,585 Commissary sales — — 255,829 19,797 — ( 44,808 ) 230,818 Other revenues — — — 3,497 21,535 ( 3,573 ) 21,459 Advertising funds revenue — — — 4,952 44,023 ( 7,622 ) 41,353 Total revenues $ 138,936 $ 33,268 $ 255,829 $ 45,040 $ 65,558 $ ( 56,234 ) $ 482,397 Three Months Ended June 29, 2025 (In thousands) Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 175,797 $ — $ — $ 3,192 $ — $ — $ 178,989 Franchise royalties and fees — 36,603 — 12,943 — ( 1,244 ) 48,302 Commissary sales — — 267,659 19,730 — ( 52,813 ) 234,576 Other revenues — — — 3,409 24,301 ( 4,574 ) 23,136 Advertising funds revenue — — — 4,910 49,460 ( 10,207 ) 44,163 Total revenues $ 175,797 $ 36,603 $ 267,659 $ 44,184 $ 73,761 $ ( 68,838 ) $ 529,166 Six Months Ended June 28, 2026 (In thousands) Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 278,607 $ — $ — $ 6,709 $ — $ — $ 285,316 Franchise royalties and fees — 67,955 — 26,673 — ( 465 ) 94,163 Commissary sales — — 502,583 37,838 — ( 86,962 ) 453,459 Other revenues — — — 6,987 43,497 ( 7,237 ) 43,247 Advertising funds revenue — — — 10,060 92,445 ( 17,684 ) 84,821 Total revenues $ 278,607 $ 67,955 $ 502,583 $ 88,267 $ 135,942 $ ( 112,348 ) $ 961,006 26 Six Months Ended June 29, 2025 (In thousands) Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 346,592 $ — $ — $ 6,278 $ — $ — $ 352,870 Franchise royalties and fees — 73,414 — 25,447 — ( 2,503 ) 96,358 Commissary sales — — 532,036 35,752 — ( 104,271 ) 463,517 Other revenues — — — 6,693 49,380 ( 9,180 ) 46,893 Advertising funds revenue — — — 9,125 98,712 ( 20,000 ) 87,837 Total revenues $ 346,592 $ 73,414 $ 532,036 $ 83,295 $ 148,092 $ ( 135,954 ) $ 1,047,475 27