Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 02, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 0-21660 | |
Entity Registrant Name | PAPA JOHN’S INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 61-1203323 | |
Entity Address, Address Line One | 2002 Papa John’s Boulevard | |
Entity Address, City or Town | Louisville | |
Entity Address, State or Province | KY | |
Entity Address, Postal Zip Code | 40299-2367 | |
City Area Code | 502 | |
Local Phone Number | 261-7272 | |
Title of 12(b) Security | Common stock, $0.01 par value | |
Trading Symbol | PZZA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,625,886 | |
Entity Central Index Key | 0000901491 | |
Current Fiscal Year End Date | --12-29 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 24,305 | $ 40,587 |
Accounts receivable, net | 93,460 | 104,244 |
Notes receivable, current portion | 4,581 | 5,199 |
Income tax receivable | 2,771 | 2,577 |
Inventories | 37,656 | 36,126 |
Prepaid expenses and other current assets | 58,762 | 42,285 |
Assets held for sale | 4,205 | 0 |
Total current assets | 225,740 | 231,018 |
Property and equipment, net | 265,693 | 282,812 |
Finance lease right-of-use assets, net | 28,759 | 31,740 |
Operating lease right-of-use assets | 154,371 | 164,158 |
Notes receivable, less current portion, net | 9,915 | 12,346 |
Goodwill | 75,547 | 76,206 |
Other assets | 78,402 | 76,725 |
Total assets | 838,427 | 875,005 |
Current liabilities: | ||
Accounts payable | 63,731 | 74,949 |
Income and other taxes payable | 6,810 | 17,948 |
Accrued expenses and other current liabilities | 149,673 | 158,167 |
Current deferred revenue | 19,941 | 20,427 |
Current finance lease liabilities | 7,815 | 9,029 |
Current operating lease liabilities | 24,874 | 24,076 |
Current portion of long-term debt | 2,375 | 0 |
Total current liabilities | 275,219 | 304,596 |
Deferred revenue | 19,011 | 20,366 |
Long-term finance lease liabilities | 22,382 | 24,144 |
Long-term operating lease liabilities | 144,569 | 151,050 |
Long-term debt, less current portion, net | 758,861 | 757,422 |
Other long-term liabilities | 63,550 | 60,192 |
Total liabilities | 1,283,592 | 1,317,770 |
Redeemable noncontrolling interests | 975 | 851 |
Stockholders’ deficit: | ||
Common stock ($0.01 par value per share; issued 49,280 at June 30, 2024 and 49,235 at December 31, 2023) | 493 | 492 |
Additional paid-in capital | 446,547 | 452,290 |
Accumulated other comprehensive loss | (7,358) | (7,803) |
Retained earnings | 215,800 | 219,027 |
Treasury stock (16,658 shares at June 30, 2024 and 16,747 shares at December 31, 2023, at cost) | (1,117,140) | (1,123,098) |
Total stockholders’ deficit | (461,658) | (459,092) |
Noncontrolling interests in subsidiaries | 15,518 | 15,476 |
Total Stockholders’ deficit | (446,140) | (443,616) |
Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit | $ 838,427 | $ 875,005 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued (in shares) | 49,280 | 49,235 |
Treasury stock (in shares) | 16,658 | 16,747 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Revenues: | ||||
Total revenues | $ 507,894 | $ 514,530 | $ 1,021,810 | $ 1,041,579 |
Costs and expenses: | ||||
General and administrative expenses | 57,714 | 50,324 | 116,173 | 102,268 |
Depreciation and amortization | 17,594 | 15,690 | 35,268 | 30,411 |
Total costs and expenses | 479,668 | 479,618 | 959,866 | 968,871 |
Operating income | 28,226 | 34,912 | 61,944 | 72,708 |
Net interest expense | (10,896) | (11,275) | (21,959) | (20,296) |
Income before income taxes | 17,330 | 23,637 | 39,985 | 52,412 |
Income tax expense | 4,794 | 5,778 | 12,535 | 12,007 |
Net income before attribution to noncontrolling interests | 12,536 | 17,859 | 27,450 | 40,405 |
Net income attributable to noncontrolling interests | (293) | (91) | (571) | (261) |
Net income attributable to the Company | $ 12,243 | $ 17,768 | $ 26,879 | $ 40,144 |
Basic earnings per common share (in dollars per share) | $ 0.37 | $ 0.55 | $ 0.82 | $ 1.20 |
Diluted earnings per common share (in dollars per share) | $ 0.37 | $ 0.54 | $ 0.82 | $ 1.20 |
Basic weighted average common shares outstanding (in shares) | 32,730 | 32,563 | 32,688 | 33,359 |
Diluted weighted average common shares outstanding (in shares) | 32,853 | 32,650 | 32,871 | 33,487 |
Dividends declared per common share (in dollars per share) | $ 0.46 | $ 0.42 | $ 0.92 | $ 0.84 |
Domestic Company-owned restaurants | ||||
Revenues: | ||||
Total revenues | $ 173,207 | $ 175,780 | $ 349,431 | $ 355,646 |
Costs and expenses: | ||||
Operating costs (excluding depreciation and amortization shown separately below): | 138,033 | 143,705 | 276,786 | 291,489 |
North America franchising | ||||
Revenues: | ||||
Total revenues | 34,409 | 34,711 | 70,106 | 70,783 |
North America commissaries | ||||
Revenues: | ||||
Total revenues | 198,197 | 206,980 | 401,484 | 419,546 |
Costs and expenses: | ||||
Operating costs (excluding depreciation and amortization shown separately below): | 182,299 | 190,468 | 367,498 | 386,883 |
International | ||||
Revenues: | ||||
Total revenues | 39,701 | 34,608 | 80,409 | 66,071 |
Costs and expenses: | ||||
Operating costs (excluding depreciation and amortization shown separately below): | 27,077 | 20,435 | 55,423 | 37,746 |
Other | ||||
Revenues: | ||||
Total revenues | 62,380 | 62,451 | 120,380 | 129,533 |
Costs and expenses: | ||||
Operating costs (excluding depreciation and amortization shown separately below): | $ 56,951 | $ 58,996 | $ 108,718 | $ 120,074 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income before attribution to noncontrolling interests | $ 12,536 | $ 17,859 | $ 27,450 | $ 40,405 | |
Other comprehensive income (loss), before tax: | |||||
Foreign currency translation adjustments | 165 | 405 | (381) | 1,847 | |
Interest rate swaps | [1] | 88 | 1,514 | 956 | 1,850 |
Other comprehensive income (loss), before tax | 253 | 1,919 | 575 | 3,697 | |
Income tax effect: | |||||
Foreign currency translation adjustments | (37) | (93) | 86 | (425) | |
Interest rate swaps | [2] | (20) | (349) | (216) | (426) |
Income tax effect | (57) | (442) | (130) | (851) | |
Other comprehensive income (loss), net of tax | 196 | 1,477 | 445 | 2,846 | |
Comprehensive income before attribution to noncontrolling interests | 12,732 | 19,336 | 27,895 | 43,251 | |
Less: comprehensive income, redeemable noncontrolling interests | (91) | (59) | (190) | (105) | |
Less: comprehensive income, nonredeemable noncontrolling interests | (202) | (32) | (381) | (156) | |
Comprehensive income attributable to the Company | $ 12,439 | $ 19,245 | $ 27,324 | $ 42,990 | |
[1]Amounts reclassified out of accumulated other comprehensive loss into net interest income (expense) include $197 and $397 for the three and six months ended June 30, 2024, respectively, and $(36) and $(243) for the three and six months ended June 25, 2023, respectively.[2]The income tax effects of amounts reclassified out of accumulated other comprehensive loss were $(45) and $(90) for the three and six months ended June 30, 2024, respectively, and $8 and $55 for the three and six months ended June 25, 2023, respectively. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Income tax benefit (expense) | $ (4,794) | $ (5,778) | $ (12,535) | $ (12,007) |
Interest Rate Swap | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | ||||
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Income tax benefit (expense) | (45) | 8 | (90) | 55 |
Interest Rate Swap | Interest expense | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Amounts reclassified out of accumulated other comprehensive loss into net interest income (expense) | $ 197 | $ (36) | $ 397 | $ (243) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Noncontrolling Interests in Subsidiaries | |||
Beginning balance (in shares) at Dec. 25, 2022 | 34,736 | |||||||||
Beginning balance at Dec. 25, 2022 | $ (270,664) | $ 491 | $ 449,829 | $ (10,135) | [1] | $ 195,856 | $ (922,434) | [2] | $ 15,729 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | [3] | 40,300 | 40,144 | 156 | ||||||
Other comprehensive income (loss), net of tax | 2,846 | 2,846 | [1] | |||||||
Dividends on common stock | (28,485) | 54 | (28,539) | |||||||
Exercise of stock options (in shares) | 17 | |||||||||
Exercise of stock options | $ 683 | $ 1 | 682 | |||||||
Acquisition of Company common stock (in shares) | (2,523) | (2,523) | ||||||||
Acquisition of Company common stock | $ (212,444) | (212,444) | [2] | |||||||
Stock-based compensation expense | 8,498 | 8,498 | ||||||||
Issuance of restricted stock (in shares) | 227 | |||||||||
Issuance of restricted stock | 0 | (6,542) | 6,542 | [2] | ||||||
Tax effect of restricted stock awards (in shares) | (73) | |||||||||
Tax effect of restricted stock awards | (6,108) | (6,108) | ||||||||
Distributions to noncontrolling interests | (323) | (323) | ||||||||
Other (in shares) | 10 | |||||||||
Other | 218 | (449) | 667 | [2] | ||||||
Ending balance (in shares) at Jun. 25, 2023 | 32,394 | |||||||||
Ending balance at Jun. 25, 2023 | (465,479) | $ 492 | 445,964 | (7,289) | [1] | 207,461 | (1,127,669) | [2] | 15,562 | |
Beginning balance (in shares) at Mar. 26, 2023 | 32,356 | |||||||||
Beginning balance at Mar. 26, 2023 | (475,325) | $ 492 | 443,686 | (8,766) | [1] | 203,569 | (1,130,136) | [2] | 15,830 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | [3] | 17,800 | 17,768 | 32 | ||||||
Other comprehensive income (loss), net of tax | 1,477 | 1,477 | [1] | |||||||
Dividends on common stock | (13,822) | 54 | (13,876) | |||||||
Exercise of stock options (in shares) | 2 | |||||||||
Exercise of stock options | $ 68 | 68 | ||||||||
Acquisition of Company common stock (in shares) | 0 | |||||||||
Stock-based compensation expense | $ 4,601 | 4,601 | ||||||||
Issuance of restricted stock (in shares) | 30 | |||||||||
Issuance of restricted stock | 0 | (1,933) | 1,933 | [2] | ||||||
Tax effect of restricted stock awards (in shares) | (1) | |||||||||
Tax effect of restricted stock awards | (109) | (109) | ||||||||
Distributions to noncontrolling interests | (300) | (300) | ||||||||
Other (in shares) | 7 | |||||||||
Other | 131 | (403) | 534 | [2] | ||||||
Ending balance (in shares) at Jun. 25, 2023 | 32,394 | |||||||||
Ending balance at Jun. 25, 2023 | $ (465,479) | $ 492 | 445,964 | (7,289) | [1] | 207,461 | (1,127,669) | [2] | 15,562 | |
Beginning balance (in shares) at Dec. 31, 2023 | 32,500 | 32,488 | ||||||||
Beginning balance at Dec. 31, 2023 | $ (443,616) | $ 492 | 452,290 | (7,803) | [4] | 219,027 | (1,123,098) | 15,476 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | [5] | 27,260 | 26,879 | 381 | ||||||
Other comprehensive income (loss), net of tax | 445 | 445 | [4] | |||||||
Dividends on common stock | (30,042) | 64 | (30,106) | |||||||
Exercise of stock options (in shares) | 20 | |||||||||
Exercise of stock options | $ 933 | $ 1 | 932 | |||||||
Acquisition of Company common stock (in shares) | 0 | |||||||||
Stock-based compensation expense | $ 2,545 | 2,545 | ||||||||
Issuance of restricted stock (in shares) | 157 | |||||||||
Issuance of restricted stock | 0 | (5,610) | 5,610 | |||||||
Tax effect of restricted stock awards (in shares) | (48) | |||||||||
Tax effect of restricted stock awards | (3,330) | (3,330) | ||||||||
Distributions to noncontrolling interests | (339) | (339) | ||||||||
Other (in shares) | 5 | |||||||||
Other | $ 4 | (344) | 348 | |||||||
Ending balance (in shares) at Jun. 30, 2024 | 32,600 | 32,622 | ||||||||
Ending balance at Jun. 30, 2024 | $ (446,140) | $ 493 | 446,547 | (7,358) | [4] | 215,800 | (1,117,140) | 15,518 | ||
Beginning balance (in shares) at Mar. 31, 2024 | 32,604 | |||||||||
Beginning balance at Mar. 31, 2024 | (446,423) | $ 493 | 444,793 | (7,554) | [4] | 218,608 | (1,118,196) | 15,433 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | [5] | 12,445 | 12,243 | 202 | ||||||
Other comprehensive income (loss), net of tax | 196 | 196 | [4] | |||||||
Dividends on common stock | (15,019) | 32 | (15,051) | |||||||
Exercise of stock options (in shares) | 2 | |||||||||
Exercise of stock options | $ 92 | 92 | ||||||||
Acquisition of Company common stock (in shares) | 0 | |||||||||
Stock-based compensation expense | $ 2,915 | 2,915 | ||||||||
Issuance of restricted stock (in shares) | 16 | |||||||||
Issuance of restricted stock | 0 | (900) | 900 | |||||||
Tax effect of restricted stock awards (in shares) | (3) | |||||||||
Tax effect of restricted stock awards | (138) | (138) | ||||||||
Distributions to noncontrolling interests | (117) | (117) | ||||||||
Other (in shares) | 3 | |||||||||
Other | $ (91) | (247) | 156 | |||||||
Ending balance (in shares) at Jun. 30, 2024 | 32,600 | 32,622 | ||||||||
Ending balance at Jun. 30, 2024 | $ (446,140) | $ 493 | $ 446,547 | $ (7,358) | [4] | $ 215,800 | $ (1,117,140) | $ 15,518 | ||
[1] At June 25, 2023, the accumulated other comprehensive loss of $7,289 was comprised of net unrealized foreign currency translation loss of $7,274 and net unrealized loss on the interest rate swap agreements of $15. Acquisition of Company common stock for the six months ended June 25, 2023, includes $2,804 of transaction costs directly attributable to share repurchases, including a 1% excise tax incurred under the Inflation Reduction Act of 2022. Net income to the Company for the three and six months ended June 25, 2023 excludes $59 and $105, respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements. At June 30, 2024, the accumulated other comprehensive loss of $7,358 was comprised of net unrealized foreign currency translation loss of $7,784 and net unrealized gain on the interest rate swap agreements of $426. Net income to the Company for the three and six months ended June 30, 2024 excludes $91 and $190, respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Deficit (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||||||||||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 26, 2023 | Dec. 25, 2022 | |||||||||
Stockholders' equity | $ (446,140) | $ (465,479) | $ (446,140) | $ (465,479) | $ (446,423) | $ (443,616) | $ (475,325) | $ (270,664) | ||||||||
Transaction costs on share repurchases | 2,804 | |||||||||||||||
Accumulated other comprehensive loss | ||||||||||||||||
Stockholders' equity | (7,358) | [1] | (7,289) | [2] | (7,358) | [1] | (7,289) | [2] | $ (7,554) | [1] | $ (7,803) | [1] | $ (8,766) | [2] | $ (10,135) | [2] |
Net unrealized foreign currency translation loss | ||||||||||||||||
Stockholders' equity | (7,784) | (7,274) | (7,784) | (7,274) | ||||||||||||
Net unrealized gain (loss) on interest rate swap agreements | ||||||||||||||||
Stockholders' equity | 426 | (15) | 426 | (15) | ||||||||||||
Corporate Joint Venture | ||||||||||||||||
Net income allocable to the redeemable noncontrolling interest for joint venture arrangements | $ 91 | $ 59 | $ 190 | $ 105 | ||||||||||||
[1] At June 30, 2024, the accumulated other comprehensive loss of $7,358 was comprised of net unrealized foreign currency translation loss of $7,784 and net unrealized gain on the interest rate swap agreements of $426. At June 25, 2023, the accumulated other comprehensive loss of $7,289 was comprised of net unrealized foreign currency translation loss of $7,274 and net unrealized loss on the interest rate swap agreements of $15. |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 25, 2023 | |
Operating activities | ||
Net income before attribution to noncontrolling interests | $ 27,450 | $ 40,405 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for allowance for credit losses on accounts and notes receivable | 2,397 | 595 |
Depreciation and amortization | 35,268 | 30,411 |
Deferred income taxes | 2,812 | 3,664 |
Stock-based compensation expense | 2,545 | 8,498 |
Refranchising and impairment losses | 14,713 | 0 |
Loss on disposal of property and equipment | 965 | 0 |
Other | 800 | (452) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 9,974 | 4,299 |
Income tax receivable | (203) | 6,683 |
Inventories | (1,748) | 4,109 |
Prepaid expenses and other current assets | (4,358) | 46 |
Other assets and liabilities | (5,788) | 140 |
Accounts payable | (11,364) | (8,174) |
Income and other taxes payable | (10,957) | (514) |
Accrued expenses and other current liabilities | (18,710) | 7,203 |
Deferred revenue | (1,839) | (3,178) |
Net cash provided by operating activities | 41,957 | 93,735 |
Investing activities | ||
Purchases of property and equipment | (29,155) | (34,759) |
Notes issued | (153) | (4,374) |
Repayments of notes issued | 1,794 | 3,224 |
Proceeds from dispositions, net of cash transferred | 1,495 | 0 |
Other | 2,178 | 182 |
Net cash used in investing activities | (23,841) | (35,727) |
Financing activities | ||
Net proceeds of revolving credit facilities | 3,024 | 186,529 |
Proceeds from exercise of stock options | 933 | 682 |
Acquisition of Company common stock | 0 | (210,348) |
Dividends paid to common stockholders | (30,212) | (28,485) |
Tax payments for equity award issuances | (3,330) | (6,108) |
Distributions to noncontrolling interests | (405) | (323) |
Principal payments on finance leases | (4,796) | (3,669) |
Other | 358 | 102 |
Net cash used in financing activities | (34,428) | (61,620) |
Effect of exchange rate changes on cash and cash equivalents | 30 | 11 |
Change in cash and cash equivalents | (16,282) | (3,601) |
Cash and cash equivalents at beginning of period | 40,587 | 47,373 |
Cash and cash equivalents at end of period | $ 24,305 | $ 43,772 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 29, 2024. 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 31, 2023. In discussions of our business, “Domestic” is defined as within the contiguous United States, “North America” includes Canada, and “International” includes the rest of the world other than North America. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 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. 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 and Canada 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 85 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. The Company has consolidated PJMF in its financial results in accordance with Accounting Standards Codification (“ASC”) 810, “ Consolidation .” 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, intangible assets, contract assets and contract liabilities including the customer loyalty program obligation, property and equipment, right-of-use assets and lease liabilities, gift card breakage, insurance reserves and tax 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 98 restaurants at June 30, 2024 and June 25, 2023, 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. Net income attributable to these joint ventures for the three and six months ended June 30, 2024 and June 25, 2023 was as follows: Three Months Ended Six Months Ended (In thousands) June 30, June 25, June 30, June 25, Papa John’s International, Inc. $ 739 $ 228 $ 1,331 $ 625 Redeemable noncontrolling interests 91 59 190 105 Nonredeemable noncontrolling interests 202 32 381 156 Total net income $ 1,032 $ 319 $ 1,902 $ 886 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. Significant 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. 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. 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 30, 2024 and December 31, 2023 are as follows: Fair Value Measurements (In thousands) Carrying Level 1 Level 2 Level 3 June 30, 2024 Financial assets: Cash surrender value of life insurance policies (a) $ 29,349 $ 29,349 $ — $ — Interest rate swaps (b) $ 364 $ — $ 364 $ — December 31, 2023 Financial assets: Cash surrender value of life insurance policies (a) $ 29,449 $ 29,449 $ — $ — Interest rate swaps (b) $ 107 $ — $ 107 $ — Financial liabilities: Interest rate swaps (b) $ 483 $ — $ 483 $ — ___________________________________ (a) Represents life insurance policies held in our non-qualified deferred compensation plan. (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”). Interest rate swaps entered into prior to 2023 were based on London Interbank Offered Rates (“LIBOR”). There were no transfers among levels within the fair value hierarchy during the three and six months ended June 30, 2024 or fiscal year 2023. 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 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 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 (In thousands) Carrying Fair Carrying Fair 3.875% Senior Notes $ 400,000 $ 353,000 $ 400,000 $ 352,500 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. 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 31, 2023 $ 8,353 $ 16,092 Current period provision for expected credit losses, net 1,073 1,324 Write-offs charged against the allowance (1,181) — Balance at June 30, 2024 $ 8,245 $ 17,416 Assets Held for Sale Assets held for sale are recorded at the lower of their carrying value or fair value less estimated cost to sell. Certain assets previously classified within property and equipment, net, related to two Domestic Quality Control Centers (“QC Centers”) that were sold on August 2, 2024 for a purchase price of $46.7 million were classified within Assets held for sale in the Condensed Consolidated Balance Sheets at June 30, 2024 for $3.4 million, which represents their carrying value. Certain assets related to 20 Company-owned restaurants in the United Kingdom (“UK”) that were sold on July 1, 2024 were classified within Assets held for sale in the Condensed Consolidated Balance Sheets at June 30, 2024 and were remeasured to $0.8 million, which represents their fair value less estimated cost to sell. The remeasurement resulted in charges of $0.6 million during the three months ended June 30, 2024, which were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations. See also “Note 9. Restructuring” for more information on the UK Company-owned restaurants and “Note 12. Subsequent Events” for more information on the QC Centers. 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 store level as these represent the lowest level for which identifiable cash flows and 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. The Company determined that indicators of impairment existed as of June 30, 2024 within one Domestic Company-owned restaurant operating market and recorded non-cash impairment charges of $3.3 million for property and equipment and $0.7 million for intangible assets for the three and six months ended June 30, 2024. Separately, the Company recorded impairments related to International Company-owned restaurants in connection with its International Transformation Plan during the three and six months ended June 30, 2024, as further described in “Note 9. Restructuring”. These impairment charges were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations. Recent Accounting Pronouncements Segment Disclosures In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, “ Improvements to Reportable Segment Disclosure s.” The ASU expands the scope and frequency of segment disclosures and introduces the concept of a “significant expense principle,” which requires entities to disclose significant expense categories and amounts that are regularly provided to the chief operating decision maker (“CODM”) and included within the reported measure of a segment’s profit or loss. The ASU also changes current disclosure requirements by allowing entities to report multiple measures of a segment’s profit or loss, provided the reported measures are used by the CODM to assess performance and allocate resources and that the measure closest to GAAP is also provided. Finally, the ASU requires all segment profit or loss and assets disclosures to be provided on both an annual and interim basis and requires entities to disclose the title and position of the individual identified as the CODM. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and shall be applied retrospectively to all periods presented in the financial statements. The Company is currently evaluating the standard and determining the extent of additional interim and annual segment disclosures that will be required. Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU provides for additional levels of details within the required rate reconciliation table to include additional categories of information about federal, state, and foreign income taxes and requires entities to further disaggregate information about income taxes paid, net of refunds. The ASU is effective for fiscal years beginning after December 15, 2024 and shall be applied prospectively. The Company is currently evaluating the standard and determining the extent of additional disclosures that will be required. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Leases | 3. Leases Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At June 30, 2024, we leased and subleased approximately 350 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 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 47 Domestic leases. These leases have varying terms, the latest of which expires in 2036. As of June 30, 2024, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $6.6 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. 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 30, 2024 June 25, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 759 $ 702 Financing cash flows from finance leases 4,796 3,669 Operating cash flows from operating leases (a) 19,710 18,738 Right-of-use assets obtained in exchange for new finance lease liabilities 2,988 14,129 Right-of-use assets obtained in exchange for new operating lease liabilities 14,343 12,128 Cash received from sublease income 3,355 5,278 ___________________________________ (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. |
Leases | 3. Leases Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At June 30, 2024, we leased and subleased approximately 350 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 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 47 Domestic leases. These leases have varying terms, the latest of which expires in 2036. As of June 30, 2024, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $6.6 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. 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 30, 2024 June 25, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 759 $ 702 Financing cash flows from finance leases 4,796 3,669 Operating cash flows from operating leases (a) 19,710 18,738 Right-of-use assets obtained in exchange for new finance lease liabilities 2,988 14,129 Right-of-use assets obtained in exchange for new operating lease liabilities 14,343 12,128 Cash received from sublease income 3,355 5,278 ___________________________________ (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. |
Leases | 3. Leases Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At June 30, 2024, we leased and subleased approximately 350 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 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 47 Domestic leases. These leases have varying terms, the latest of which expires in 2036. As of June 30, 2024, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $6.6 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. 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 30, 2024 June 25, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 759 $ 702 Financing cash flows from finance leases 4,796 3,669 Operating cash flows from operating leases (a) 19,710 18,738 Right-of-use assets obtained in exchange for new finance lease liabilities 2,988 14,129 Right-of-use assets obtained in exchange for new operating lease liabilities 14,343 12,128 Cash received from sublease income 3,355 5,278 ___________________________________ (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. |
Papa John's Marketing Fund, Inc
Papa John's Marketing Fund, Inc. | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Papa John's Marketing Fund, Inc. | 4. Papa John’s Marketing Fund, Inc. PJMF, which is a consolidated VIE where the Company has been identified as the primary beneficiary, 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 Other revenues and Other expenses. PJMF also has a wholly-owned subsidiary, Papa Card, Inc., which administers the Company’s gift card programs. 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 30, December 31, 2023 Assets Current assets: Cash and cash equivalents $ 4,547 $ 5,494 Accounts receivable, net 15,530 18,026 Prepaid expenses and other current assets 12,181 2,223 Total current assets 32,258 25,743 Deferred income taxes 674 674 Total assets $ 32,932 $ 26,417 Liabilities Current liabilities: Accounts payable $ — $ 1,509 Accrued expenses and other current liabilities 32,268 22,245 Current portion of long-term debt 2,375 — Current deferred revenue 3,701 4,327 Total current liabilities 38,344 28,081 Deferred revenue 2,021 2,627 Total liabilities $ 40,365 $ 30,708 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 5. Revenue Recognition Contract Balances Our contract liabilities primarily relate to franchise fees, unredeemed gift card liabilities, and loyalty program obligations, which we classify as Deferred revenue on the Condensed Consolidated Balance Sheets. During the three and six months ended June 30, 2024, the Company recognized $8.2 million and $16.3 million in revenue, respectively, related to deferred revenue compared to $7.9 million and $16.3 million, respectively, for the three and six months ended June 25, 2023. The following table includes a breakout of contract liability balances (in thousands): Contract Liabilities June 30, 2024 December 31, 2023 Change Franchise fee liabilities $ 20,065 $ 20,564 $ (499) Unredeemed gift card liabilities 5,722 6,955 (1,233) Customer loyalty program obligations 13,165 13,274 (109) Total contract liabilities $ 38,952 $ 40,793 $ (1,841) 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 $12.2 million and $7.9 million, respectively, at June 30, 2024 and December 31, 2023. For the three and six months ended June 30, 2024 and June 25, 2023, revenue was reduced approximately $1.4 million and $2.6 million and $0.9 million and $1.8 million, 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 (in thousands) 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 Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Franchise fees $ 2,990 $ 2,609 $ 2,426 $ 2,190 $ 1,957 $ 4,628 $ 16,800 At June 30, 2024, approximately $3.3 million of area development fees related to unopened stores and International unearned royalties are included in Deferred revenue. Timing of revenue recognition is dependent upon the timing of store openings and franchisees’ revenues. Gift card liabilities, which are included in Deferred revenue, will be recognized in Company-owned restaurant revenues when gift cards are redeemed. The Company will recognize redemption fee revenue in Other revenues when cards are redeemed at franchised restaurant locations. The Company applies the practical expedient in ASC 606, “ Revenue Recognition” and does not disclose information about remaining performance obligations that have original expected durations of one year or less. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Common Stock | 6. Common Stock Shares Authorized and Outstanding The Company has authorized 100.0 million shares of common stock as of June 30, 2024 and December 31, 2023. The Company’s outstanding shares of common stock, net of repurchased shares of common stock held as treasury stock, were 32.6 million shares at June 30, 2024, compared to 32.5 million shares at December 31, 2023. Share Repurchase Program On October 28, 2021, our Board of Directors (the “Board”) approved a share repurchase program with an indefinite duration for up to $425.0 million of the Company’s common stock. The following table summarizes our repurchase activity under our share repurchase programs for the three and six months ended June 30, 2024 and June 25, 2023: (In thousands, except average price per share) Total Number of Shares Purchased Average Price Paid per Share Aggregate Cost of Shares Purchased Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs Three Months Ended June 30, 2024 — $ — $ — $ 90,160 June 25, 2023 — $ — $ — $ 90,160 (In thousands, except average price per share) Total Number of Shares Purchased (a) Average Price Paid per Share Aggregate Cost of Shares Purchased (b) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs Six Months Ended June 30, 2024 — $ — $ — $ 90,160 June 25, 2023 2,523 $ 83.10 $ 209,640 $ 90,160 (a) Shares repurchased during the six months ended June 25, 2023 included 2,176,928 shares repurchased on March 1, 2023 from certain funds affiliated with, or managed by, Starboard Value LP (collectively, “Starboard”), at a price of $82.52 per share, for aggregate consideration of $179.6 million. Refer to Note 18 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 for further details. (b) Aggregate cost of shares purchased for the six months ended June 25, 2023 excluded $2.8 million of transaction costs directly attributable to share repurchases, including a 1% excise tax incurred under the Inflation Reduction Act of 2022. Of these costs, $2.1 million were classified as non-cash financing activities during the six months ended June 25, 2023. The timing and volume of share repurchases under the Company’s share repurchase programs 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 programs 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 programs may be commenced or suspended from time to time at the Company’s discretion without prior notice. Funding for the share repurchase programs will be provided through our credit facility, operating cash flow, stock option exercises and cash and cash equivalents. Dividends The Company paid ag gregate cash dividends of approximately $30.2 million ($0.92 per share) for the six months ended June 30, 2024. On July 31, 2024, our Board of Directors declared a third quarter dividend of $0.46 per common share (approximately $15.2 million in the aggregate), which will be paid on August 30, 2024 to stockholders of record as of the close of business on August 19, 2024. The declaration and payment of any future dividends will be at the discretion of our Board of Directors. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 7. Earnings per Share 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 (in thousands, except per share data): Three Months Ended Six Months Ended June 30, June 25, June 30, June 25, Net income available to common stockholders $ 12,243 $ 17,768 $ 26,879 $ 40,144 Basic weighted average number of shares 32,730 32,563 32,688 33,359 Dilutive effect of outstanding equity awards (a) 123 87 183 128 Diluted weighted average number of shares 32,853 32,650 32,871 33,487 Basic earnings per common share $ 0.37 $ 0.55 $ 0.82 $ 1.20 Diluted earnings per common share $ 0.37 $ 0.54 $ 0.82 $ 1.20 ___________________________________ (a) Excludes 377,000 and 207,000 shares underlying equity awards for the three and six months ended June 30, 2024, respectively, and 103,000 and 49,000 shares underlying awards for the three and six months ended June 25, 2023, respectively, as the effect of including such awards would have been anti-dilutive. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Long-term debt, net, consists of the following (in thousands): June 30, December 31, Senior notes $ 400,000 $ 400,000 Revolving facilities (a) 367,024 364,000 Outstanding debt $ 767,024 $ 764,000 Unamortized debt issuance costs (5,788) (6,578) Current portion of long-term debt (2,375) — Total long-term debt, net $ 758,861 $ 757,422 ___________________________________ (a) Revolving facilities as of June 30, 2024 includes $2.4 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 will 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 31, 2023 for further description of the provisions and covenant requirements under the Senior Notes. Credit Agreement The Company’s amended and restated credit agreement, dated September 14, 2021 and amended May 30, 2023 (as amended, the “Credit Agreement”), provides for a senior secured revolving credit facility in an aggregate available principal amount of $600.0 million (the “PJI Revolving Facility”), 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 Revolving Facility will mature on September 14, 2026. The remaining availability under the PJI Revolving Facility was approximately $235.3 million as of June 30, 2024. Refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 for further description of the provisions and covenant requirements under the Credit Agreement. 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 amended September 30, 2023, with U.S. Bank National Association, as lender. The PJMF Revolving Facility is secured by substantially all assets of PJMF. The PJMF Revolving F acility matures on September 30, 2024, but is subject to annual amendments. The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of a one month SOFR plus 1.975%. The applicable interest rate on the PJMF Revolving facility was 7.3% for the three months ended June 30, 2024. As of June 30, 2024, t he principal amount of debt outstanding under the PJMF Revolving Facility was approximately $2.4 million and is 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 Credit Agreement. Derivative Financial Instruments On June 23, 2023, the Company entered into a new interest rate swap with an initial notional value of $100.0 million to replace the Company’s prior interest rate swaps, which had a notional value of $125.0 million and matured on April 30, 2023. The objective of the interest rate swap is to mitigate the Company’s exposure to the impact of interest rate changes associated with our variable rate debt under the PJI Revolving Facility. We designated the interest rate swap as a cash flow hedge and assess hedge effectiveness at regular intervals through the maturity date of June 30, 2025. 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. As of June 30, 2024, we have the following interest rate swap agreements: Effective Dates Floating Rate Debt Fixed Rates June 23, 2023 through June 30, 2025 $ 50 million 4.55% June 23, 2023 through June 30, 2025 $ 50 million 4.55% The following table provides information on the location and amounts of our current and expired swaps in the accompanying condensed consolidated financial statements (in thousands): Interest Rate Swap Derivatives Balance Sheet Location Fair Value Fair Value Prepaid and other current assets $ 364 $ 107 Other long-term liabilities $ — $ 483 The effect of derivative instruments on the accompanying condensed consolidated financial statements is as follows (in thousands): Derivatives - Amount of Gain or Location of (Loss) Amount of (Loss) or Gain Total Net Interest Expense Interest rate swaps for the three months ended: June 30, 2024 $ 68 Interest expense $ 197 $ (10,896) June 25, 2023 $ 1,165 Interest expense $ (36) $ (11,275) Interest rate swaps for the six months ended: June 30, 2024 $ 740 Interest expense $ 397 $ (21,959) June 25, 2023 $ 1,424 Interest expense $ (243) $ (20,296) Net interest paid, including payments made or received under the swaps, was $5.8 million and $20.4 million for the three and six months ended June 30, 2024, respectively, and $5.7 million and $16.6 million for the three and six months ended June 25, 2023, respectively. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 9. Restructuring International Restructuring In December 2023, the Company announced international transformation initiatives (“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. During the fourth quarter of the year ended December 31, 2023, the Company commenced approved initiatives under the International Transformation Plan related to establishing new regional hubs across APAC (Asia Pacific), EMEA (Europe, Middle East and Africa), and Latin America that will be led by experienced general managers and their teams. During the first quarter of 2024, the Company commenced the next phase of the International Transformation Plan as approved by the Board, which involves strategic restaurant closures and divestitures in the UK. The purpose of this plan is to optimize the Company’s restaurant portfolio in the UK and improve overall profitability by closing unprofitable locations and enhancing profitability across the remaining portfolio of Company-owned restaurants. The execution of this phase of the International Transformation Plan resulted in the closure of 43 underperforming UK Company-owned restaurants during the three months ended June 30, 2024. During the second quarter of 2024, the Company completed the refranchising of 40 formerly Company-owned restaurants to existing franchisees in June 2024, which resulted in a loss on sale of $1.2 million during the three months ended June 30, 2024. Additionally, the Company refranchised an additional 20 formerly Company-owned restaurants effective July 1, 2024. The assets of these 20 stores were classified as assets held for sale on the Condensed Consolidated Balance Sheets as of June 30, 2024, and the remeasurement of these assets resulted in charges of $0.6 million during the three months ended June 30, 2024. The loss on sale and remeasurement charges were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations. Further, as a result of ongoing evaluation of our UK market, the Company closed an additional 19 franchised locations during the first six months of 2024. We are finalizing the evaluation of our restaurant portfolio in the UK, which may result in limited strategic restaurant closures with the Company’s efforts turning towards growth opportunities within this market as we complete optimization of the portfolio. The Company evaluates its property and equipment and other long-lived assets (primarily right-of-use operating lease assets) for potential indicators of impairment at least annually, or as facts and circumstances indicate that the carrying value of the asset group may not be recoverable. The asset group is at the store level for our UK-based restaurants and primarily includes lease right-of-use assets for franchised stores and lease right-of-use assets and leasehold improvements for Company-owned stores. Due to indicators of potential impairment associated with the UK Company-owned and franchised store closures mentioned above, the Company performed an impairment analysis and determined that the carrying amount of the assets related to the closing UK stores were not recoverable. For the three and six months ended June 30, 2024, we recognized impairment charges for the amount by which the carrying value exceeded the estimated fair value of the asset groups. Fair values were determined based on an income approach, specifically a discounted cash flow ("DCF") model, primarily using estimated sublease income considering market rental rates. Management judgment is involved in determining the estimated fair value and includes uncertainties that under different assumptions and circumstances could drive material changes in the fair value determination. In connection with the International Transformation Plan, the Company incurred restructuring related costs of $6.1 million and $15.7 million for the three and six months ended June 30, 2024, respectively, primarily related to lease right-of-use asset and leasehold improvement impairment charges, losses associated with the refranchising of corporate stores, losses on notes receivable with a UK franchisee in relation to franchised store closures, lease termination impacts related to closed stores, employee termination costs , and professional advisory services and other related costs. The Company has incurred total restructuring related costs of $17.9 million since commencement of the International Transformation Plan. These costs were included in General and administrative expenses in the Condensed Consolidated Statements of Operations. Total estimated pre-tax costs associated with the International Transformation Plan are approximately $25 million to $35 million (inclusive of the $17.9 million incurred through the second quarter of 2024), all of which will be recorded within our International segment, and we expect to incur the remainder of these costs through 2024 and 2025. The following table summarizes restructuring related costs recorded for the three and six months ended June 30, 2024 (in thousands): Three Months Ended Six Months Ended June 30, June 30, Long-lived asset impairment charges $ 1,422 $ 8,976 Loss on franchisee notes receivable 1,564 1,564 Loss on refranchising Company-owned stores 1,737 1,737 Professional services and other related costs 1,355 2,701 Employee termination costs, net (a) (255) 368 Operating lease terminations 306 306 Total international transformation costs, net $ 6,129 $ 15,652 (a) During the three months ended June 30, 2024, the Company had a partial reversal of severance originally estimated in connection with the closure of Company-owned restaurants. Includes noncash reversal of $0.1 million related to the forfeiture of unvested stock-based compensation awards. The following table presents changes in the balance of accrued expenses relating to approved initiatives, which are recorded in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets (in thousands): Employee severance Professional services and other related costs Other Total Balance as of December 31, 2023 $ 1,227 $ 527 $ 29 $ 1,783 Charges 444 2,701 — 3,145 Payments (1,286) (2,605) (29) (3,920) Balance as of June 30, 2024 $ 385 $ 623 $ — $ 1,008 |
Litigation, Commitments and Con
Litigation, Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Commitments and Contingencies | 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. In accordance with ASC 450, “ Contingencies, ” the Company has made accruals with respect to these matters, where appropriate, which are reflected in the Company’s condensed consolidated financial statements. 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 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | 11. Segment Information We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International operations. The Domestic Company-owned restaurant segment consists of the operations of all Domestic Company-owned restaurants and derives its revenues principally from retail sales of pizza, Papadias, and side items, including breadsticks, Papa Bites, cheesesticks, boneless chicken wings and bone-in chicken wings, dessert items and canned or bottled beverages. 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 collection of royalties from our franchisees located in the United States and Canada. The North America commissary segment consists of the operations of our regional dough production and product distribution centers 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 the operations of all Company-owned restaurants located in the UK, as well as 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. All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, we refer to as “all other,” which consists of operations that derive revenues from the sale, principally to Company-owned and franchised restaurants, of information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms, as well as franchise contributions to marketing funds. Generally, we evaluate performance and allocate resources based on operating income. Certain administrative and capital costs are allocated to segments based upon predetermined rates or estimated resource usage. We account for intercompany sales and transfers as if the sales or transfers were to third parties and eliminate the activity in consolidation. Our reportable segments are 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. No single external customer accounted for 10% or more of our consolidated revenues. The following tables present our segment information. Three Months Ended Six Months Ended (In thousands) June 30, June 25, June 30, June 25, Revenues: Domestic Company-owned restaurants $ 173,207 $ 175,780 $ 349,431 $ 355,646 North America franchising 34,409 34,711 70,106 70,783 North America commissaries 198,197 206,980 401,484 419,546 International 46,547 41,354 93,220 80,058 All others 55,534 55,705 107,569 115,546 Total revenues $ 507,894 $ 514,530 $ 1,021,810 $ 1,041,579 Intersegment revenues: North America franchising $ 1,041 $ 1,025 $ 2,090 $ 2,077 North America commissaries 50,303 51,586 99,570 103,403 International — 869 — 869 All others 13,778 16,348 26,950 33,183 Total intersegment revenues $ 65,122 $ 69,828 $ 128,610 $ 139,532 Operating income: Domestic Company-owned restaurants (a) $ 4,777 $ 6,641 $ 15,136 $ 13,291 North America franchising 32,409 32,111 66,120 65,511 North America commissaries 11,403 10,397 23,738 21,127 International (b) (2,665) 3,763 (8,654) 10,995 All others 2,170 1,343 5,368 4,500 Unallocated corporate expenses (c) (19,598) (19,701) (39,240) (43,067) Elimination of intersegment (profits) losses (270) 358 (524) 351 Total operating income $ 28,226 $ 34,912 $ 61,944 $ 72,708 Property and equipment, net: Domestic Company-owned restaurants $ 261,833 North America commissaries 147,643 International 25,034 All others 137,676 Unallocated corporate assets 245,337 Accumulated depreciation and amortization (551,830) Total property and equipment, net $ 265,693 ___________________________________ (a) The three and six months ended June 30, 2024 includes a $4.0 million non-cash impairment charge related to fixed and intangible assets related to certain Domestic restaurants. (b) The three and six months ended June 30, 2024 includes $6.1 million and $15.7 million, respectively, of costs related to the International Transformation Plan. See “Note 9. Restructuring” for additional information. The three and six months ended June 25, 2023 includes $1.3 million of costs associated with repositioning the UK portfolio as well as transaction costs related to the acquisition of stores from franchisees. (c) The three and six months ended June 25, 2023 includes $0.7 million and $2.0 million, respectively, of severance and related costs associated with the transition of certain executives. Disaggregation of Revenue In the following tables, revenues are disaggregated by major product/service line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands): Reportable Segments Three Months Ended June 30, 2024 Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total Company-owned restaurant sales $ 173,207 $ — $ — $ 11,433 $ — $ 184,640 Franchise royalties and fees — 35,450 — 12,143 — 47,593 Commissary sales — — 248,500 16,125 — 264,625 Other revenues — — — 6,846 69,312 76,158 Eliminations — (1,041) (50,303) — (13,778) (65,122) Total segment revenues 173,207 34,409 198,197 46,547 55,534 507,894 International other revenues (a) — — — (6,846) 6,846 — Total revenues $ 173,207 $ 34,409 $ 198,197 $ 39,701 $ 62,380 $ 507,894 Reportable Segments Three Months Ended June 25, 2023 Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total Company-owned restaurant sales $ 175,780 $ — $ — $ 3,018 $ — $ 178,798 Franchise royalties and fees — 35,736 — 12,196 — 47,932 Commissary sales — — 258,566 20,263 — 278,829 Other revenues — — — 6,746 72,053 78,799 Eliminations — (1,025) (51,586) (869) (16,348) (69,828) Total segment revenues 175,780 34,711 206,980 41,354 55,705 514,530 International other revenues (a) — — — (6,746) 6,746 — Total revenues $ 175,780 $ 34,711 $ 206,980 $ 34,608 $ 62,451 $ 514,530 Reportable Segments Six Months Ended June 30, 2024 Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total Company-owned restaurant sales $ 349,431 $ — $ — $ 26,460 $ — $ 375,891 Franchise royalties and fees — 72,196 — 23,599 — 95,795 Commissary sales — — 501,054 30,350 — 531,404 Other revenues — — — 12,811 134,519 147,330 Eliminations — (2,090) (99,570) — (26,950) (128,610) Total segment revenues 349,431 70,106 401,484 93,220 107,569 1,021,810 International other revenues (a) — — — (12,811) 12,811 — Total revenues $ 349,431 $ 70,106 $ 401,484 $ 80,409 $ 120,380 $ 1,021,810 Reportable Segments Six Months Ended June 25, 2023 Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total Company-owned restaurant sales $ 355,646 $ — $ — $ 3,018 $ — $ 358,664 Franchise royalties and fees — 72,860 — 24,687 — 97,547 Commissary sales — — 522,949 39,235 — 562,184 Other revenues — — — 13,987 148,729 162,716 Eliminations — (2,077) (103,403) (869) (33,183) (139,532) Total segment revenues 355,646 70,783 419,546 80,058 115,546 1,041,579 International other revenues (a) — — — (13,987) 13,987 — Total revenues $ 355,646 $ 70,783 $ 419,546 $ 66,071 $ 129,533 $ 1,041,579 ___________________________________ (a) Other revenues as reported in the Condensed Consolidated Statements of Operations include $6.8 million and $12.8 million of revenues for the three and six months ended June 30, 2024, respectively, and $6.7 million and $14.0 million of revenues for the three and six months ended June 25, 2023, respectively, that are part of the International reporting segment. These amounts include marketing fund contributions and sublease rental income from international franchisees in the United Kingdom that provide no significant contribution to income before income taxes but must be reported on a gross basis under accounting requirements. The related expenses for these Other revenues are reported in Other expenses in the Condensed Consolidated Statements of Operations. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events Sale-Leaseback of Texas and Florida QC Centers On August 2, 2024, the Company finalized the sale and subsequent leaseback of two Domestic QC Centers for a purchase price of $46.7 million. Under the terms of the leases, which commenced on August 2, 2024, we will lease the QC Centers for 17 years with two 5 year renewal options. The Company will pay annual rents under the operating leases of the Texas and Florida QC Centers of $2.0 million and $1.0 million, respectively, for the first year with annual rents increasing by 2.75% thereafter. We have reclassified all long-lived assets associated with the transaction as held for sale as of the balance sheet date, in accordance with ASC 360. We expect to record a pre-tax gain on sale of approximately $40.0 million to $42.0 million during the third quarter of 2024, as the sale was not executed as of June 30, 2024. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 12,243 | $ 17,768 | $ 26,879 | $ 40,144 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Variable Interest Entity | 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 and Canada 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 85 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. The Company has consolidated PJMF in its financial results in accordance with Accounting Standards Codification (“ASC”) 810, “ Consolidation .” |
Use of Estimates | Use of Estimates |
Noncontrolling Interests | Noncontrolling Interests Papa Johns has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 98 |
Deferred Income Tax Accounts and Tax Reserves | Deferred Income Tax Accounts and Tax Reserves We are subject to income taxes in the United States and several foreign jurisdictions. Significant 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. 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 | 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. 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. |
Allowance for Credit Losses | Allowance for Credit Losses |
Assets Held for Sale | Assets Held for Sale in the Condensed Consolidated Statements of Operations. |
Impairment of Long-lived Assets | 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 store level as these represent the lowest level for which identifiable cash flows and 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Segment Disclosures In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, “ Improvements to Reportable Segment Disclosure s.” The ASU expands the scope and frequency of segment disclosures and introduces the concept of a “significant expense principle,” which requires entities to disclose significant expense categories and amounts that are regularly provided to the chief operating decision maker (“CODM”) and included within the reported measure of a segment’s profit or loss. The ASU also changes current disclosure requirements by allowing entities to report multiple measures of a segment’s profit or loss, provided the reported measures are used by the CODM to assess performance and allocate resources and that the measure closest to GAAP is also provided. Finally, the ASU requires all segment profit or loss and assets disclosures to be provided on both an annual and interim basis and requires entities to disclose the title and position of the individual identified as the CODM. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and shall be applied retrospectively to all periods presented in the financial statements. The Company is currently evaluating the standard and determining the extent of additional interim and annual segment disclosures that will be required. Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU provides for additional levels of details within the required rate reconciliation table to include additional categories of information about federal, state, and foreign income taxes and requires entities to further disaggregate information about income taxes paid, net of refunds. The ASU is effective for fiscal years beginning after December 15, 2024 and shall be applied prospectively. The Company is currently evaluating the standard and determining the extent of additional disclosures that will be required. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of net income attributable to joint ventures | Net income attributable to these joint ventures for the three and six months ended June 30, 2024 and June 25, 2023 was as follows: Three Months Ended Six Months Ended (In thousands) June 30, June 25, June 30, June 25, Papa John’s International, Inc. $ 739 $ 228 $ 1,331 $ 625 Redeemable noncontrolling interests 91 59 190 105 Nonredeemable noncontrolling interests 202 32 381 156 Total net income $ 1,032 $ 319 $ 1,902 $ 886 |
Schedule of details for joint venture arrangements | 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 |
Schedule of fair value measurements on a recurring basis | Our financial assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 are as follows: Fair Value Measurements (In thousands) Carrying Level 1 Level 2 Level 3 June 30, 2024 Financial assets: Cash surrender value of life insurance policies (a) $ 29,349 $ 29,349 $ — $ — Interest rate swaps (b) $ 364 $ — $ 364 $ — December 31, 2023 Financial assets: Cash surrender value of life insurance policies (a) $ 29,449 $ 29,449 $ — $ — Interest rate swaps (b) $ 107 $ — $ 107 $ — Financial liabilities: Interest rate swaps (b) $ 483 $ — $ 483 $ — ___________________________________ (a) Represents life insurance policies held in our non-qualified deferred compensation plan. (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”). Interest rate swaps entered into prior to 2023 were based on London Interbank Offered Rates (“LIBOR”). June 30, 2024 December 31, 2023 (In thousands) Carrying Fair Carrying Fair 3.875% Senior Notes $ 400,000 $ 353,000 $ 400,000 $ 352,500 |
Schedule of changes of the allowance for credit losses for accounts receivable and notes receivable | 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 31, 2023 $ 8,353 $ 16,092 Current period provision for expected credit losses, net 1,073 1,324 Write-offs charged against the allowance (1,181) — Balance at June 30, 2024 $ 8,245 $ 17,416 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of supplemental cash flow information | Supplemental cash flow information related to leases for the periods reported is as follows: Six Months Ended (In thousands) June 30, 2024 June 25, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 759 $ 702 Financing cash flows from finance leases 4,796 3,669 Operating cash flows from operating leases (a) 19,710 18,738 Right-of-use assets obtained in exchange for new finance lease liabilities 2,988 14,129 Right-of-use assets obtained in exchange for new operating lease liabilities 14,343 12,128 Cash received from sublease income 3,355 5,278 ___________________________________ (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. |
Papa John's Marketing Fund, I_2
Papa John's Marketing Fund, Inc. (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of assets and liabilities of PJMF | 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 30, December 31, 2023 Assets Current assets: Cash and cash equivalents $ 4,547 $ 5,494 Accounts receivable, net 15,530 18,026 Prepaid expenses and other current assets 12,181 2,223 Total current assets 32,258 25,743 Deferred income taxes 674 674 Total assets $ 32,932 $ 26,417 Liabilities Current liabilities: Accounts payable $ — $ 1,509 Accrued expenses and other current liabilities 32,268 22,245 Current portion of long-term debt 2,375 — Current deferred revenue 3,701 4,327 Total current liabilities 38,344 28,081 Deferred revenue 2,021 2,627 Total liabilities $ 40,365 $ 30,708 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of contract liability balances | The following table includes a breakout of contract liability balances (in thousands): Contract Liabilities June 30, 2024 December 31, 2023 Change Franchise fee liabilities $ 20,065 $ 20,564 $ (499) Unredeemed gift card liabilities 5,722 6,955 (1,233) Customer loyalty program obligations 13,165 13,274 (109) Total contract liabilities $ 38,952 $ 40,793 $ (1,841) |
Schedule of estimated revenue expected to be recognized in the future | The following table (in thousands) 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 Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Franchise fees $ 2,990 $ 2,609 $ 2,426 $ 2,190 $ 1,957 $ 4,628 $ 16,800 |
Common Stock (Tables)
Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule of repurchase activity | The following table summarizes our repurchase activity under our share repurchase programs for the three and six months ended June 30, 2024 and June 25, 2023: (In thousands, except average price per share) Total Number of Shares Purchased Average Price Paid per Share Aggregate Cost of Shares Purchased Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs Three Months Ended June 30, 2024 — $ — $ — $ 90,160 June 25, 2023 — $ — $ — $ 90,160 (In thousands, except average price per share) Total Number of Shares Purchased (a) Average Price Paid per Share Aggregate Cost of Shares Purchased (b) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs Six Months Ended June 30, 2024 — $ — $ — $ 90,160 June 25, 2023 2,523 $ 83.10 $ 209,640 $ 90,160 (a) Shares repurchased during the six months ended June 25, 2023 included 2,176,928 shares repurchased on March 1, 2023 from certain funds affiliated with, or managed by, Starboard Value LP (collectively, “Starboard”), at a price of $82.52 per share, for aggregate consideration of $179.6 million. Refer to Note 18 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 for further details. (b) Aggregate cost of shares purchased for the six months ended June 25, 2023 excluded $2.8 million of transaction costs directly attributable to share repurchases, including a 1% excise tax incurred under the Inflation Reduction Act of 2022. Of these costs, $2.1 million were classified as non-cash financing activities during the six months ended June 25, 2023. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per common share | The calculations of basic and diluted earnings per common share are as follows (in thousands, except per share data): Three Months Ended Six Months Ended June 30, June 25, June 30, June 25, Net income available to common stockholders $ 12,243 $ 17,768 $ 26,879 $ 40,144 Basic weighted average number of shares 32,730 32,563 32,688 33,359 Dilutive effect of outstanding equity awards (a) 123 87 183 128 Diluted weighted average number of shares 32,853 32,650 32,871 33,487 Basic earnings per common share $ 0.37 $ 0.55 $ 0.82 $ 1.20 Diluted earnings per common share $ 0.37 $ 0.54 $ 0.82 $ 1.20 ___________________________________ (a) Excludes 377,000 and 207,000 shares underlying equity awards for the three and six months ended June 30, 2024, respectively, and 103,000 and 49,000 shares underlying awards for the three and six months ended June 25, 2023, respectively, as the effect of including such awards would have been anti-dilutive. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt, net | Long-term debt, net, consists of the following (in thousands): June 30, December 31, Senior notes $ 400,000 $ 400,000 Revolving facilities (a) 367,024 364,000 Outstanding debt $ 767,024 $ 764,000 Unamortized debt issuance costs (5,788) (6,578) Current portion of long-term debt (2,375) — Total long-term debt, net $ 758,861 $ 757,422 ___________________________________ (a) Revolving facilities as of June 30, 2024 includes $2.4 million outstanding under the PJMF Revolving Facility as defined and discussed below. |
Schedule of notional value of derivatives | As of June 30, 2024, we have the following interest rate swap agreements: Effective Dates Floating Rate Debt Fixed Rates June 23, 2023 through June 30, 2025 $ 50 million 4.55% June 23, 2023 through June 30, 2025 $ 50 million 4.55% |
Schedule of location and amounts of derivatives in the financial statements | The following table provides information on the location and amounts of our current and expired swaps in the accompanying condensed consolidated financial statements (in thousands): Interest Rate Swap Derivatives Balance Sheet Location Fair Value Fair Value Prepaid and other current assets $ 364 $ 107 Other long-term liabilities $ — $ 483 |
Schedule of effect of derivatives on the financial statements | The effect of derivative instruments on the accompanying condensed consolidated financial statements is as follows (in thousands): Derivatives - Amount of Gain or Location of (Loss) Amount of (Loss) or Gain Total Net Interest Expense Interest rate swaps for the three months ended: June 30, 2024 $ 68 Interest expense $ 197 $ (10,896) June 25, 2023 $ 1,165 Interest expense $ (36) $ (11,275) Interest rate swaps for the six months ended: June 30, 2024 $ 740 Interest expense $ 397 $ (21,959) June 25, 2023 $ 1,424 Interest expense $ (243) $ (20,296) |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring related costs | The following table summarizes restructuring related costs recorded for the three and six months ended June 30, 2024 (in thousands): Three Months Ended Six Months Ended June 30, June 30, Long-lived asset impairment charges $ 1,422 $ 8,976 Loss on franchisee notes receivable 1,564 1,564 Loss on refranchising Company-owned stores 1,737 1,737 Professional services and other related costs 1,355 2,701 Employee termination costs, net (a) (255) 368 Operating lease terminations 306 306 Total international transformation costs, net $ 6,129 $ 15,652 (a) During the three months ended June 30, 2024, the Company had a partial reversal of severance originally estimated in connection with the closure of Company-owned restaurants. Includes noncash reversal of $0.1 million related to the forfeiture of unvested stock-based compensation awards. |
Schedule of changes in accrued expenses related to approved initiatives | The following table presents changes in the balance of accrued expenses relating to approved initiatives, which are recorded in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets (in thousands): Employee severance Professional services and other related costs Other Total Balance as of December 31, 2023 $ 1,227 $ 527 $ 29 $ 1,783 Charges 444 2,701 — 3,145 Payments (1,286) (2,605) (29) (3,920) Balance as of June 30, 2024 $ 385 $ 623 $ — $ 1,008 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following tables present our segment information. Three Months Ended Six Months Ended (In thousands) June 30, June 25, June 30, June 25, Revenues: Domestic Company-owned restaurants $ 173,207 $ 175,780 $ 349,431 $ 355,646 North America franchising 34,409 34,711 70,106 70,783 North America commissaries 198,197 206,980 401,484 419,546 International 46,547 41,354 93,220 80,058 All others 55,534 55,705 107,569 115,546 Total revenues $ 507,894 $ 514,530 $ 1,021,810 $ 1,041,579 Intersegment revenues: North America franchising $ 1,041 $ 1,025 $ 2,090 $ 2,077 North America commissaries 50,303 51,586 99,570 103,403 International — 869 — 869 All others 13,778 16,348 26,950 33,183 Total intersegment revenues $ 65,122 $ 69,828 $ 128,610 $ 139,532 Operating income: Domestic Company-owned restaurants (a) $ 4,777 $ 6,641 $ 15,136 $ 13,291 North America franchising 32,409 32,111 66,120 65,511 North America commissaries 11,403 10,397 23,738 21,127 International (b) (2,665) 3,763 (8,654) 10,995 All others 2,170 1,343 5,368 4,500 Unallocated corporate expenses (c) (19,598) (19,701) (39,240) (43,067) Elimination of intersegment (profits) losses (270) 358 (524) 351 Total operating income $ 28,226 $ 34,912 $ 61,944 $ 72,708 Property and equipment, net: Domestic Company-owned restaurants $ 261,833 North America commissaries 147,643 International 25,034 All others 137,676 Unallocated corporate assets 245,337 Accumulated depreciation and amortization (551,830) Total property and equipment, net $ 265,693 ___________________________________ (a) The three and six months ended June 30, 2024 includes a $4.0 million non-cash impairment charge related to fixed and intangible assets related to certain Domestic restaurants. (b) The three and six months ended June 30, 2024 includes $6.1 million and $15.7 million, respectively, of costs related to the International Transformation Plan. See “Note 9. Restructuring” for additional information. The three and six months ended June 25, 2023 includes $1.3 million of costs associated with repositioning the UK portfolio as well as transaction costs related to the acquisition of stores from franchisees. (c) |
Schedule of revenue disaggregated by major product line | In the following tables, revenues are disaggregated by major product/service line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands): Reportable Segments Three Months Ended June 30, 2024 Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total Company-owned restaurant sales $ 173,207 $ — $ — $ 11,433 $ — $ 184,640 Franchise royalties and fees — 35,450 — 12,143 — 47,593 Commissary sales — — 248,500 16,125 — 264,625 Other revenues — — — 6,846 69,312 76,158 Eliminations — (1,041) (50,303) — (13,778) (65,122) Total segment revenues 173,207 34,409 198,197 46,547 55,534 507,894 International other revenues (a) — — — (6,846) 6,846 — Total revenues $ 173,207 $ 34,409 $ 198,197 $ 39,701 $ 62,380 $ 507,894 Reportable Segments Three Months Ended June 25, 2023 Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total Company-owned restaurant sales $ 175,780 $ — $ — $ 3,018 $ — $ 178,798 Franchise royalties and fees — 35,736 — 12,196 — 47,932 Commissary sales — — 258,566 20,263 — 278,829 Other revenues — — — 6,746 72,053 78,799 Eliminations — (1,025) (51,586) (869) (16,348) (69,828) Total segment revenues 175,780 34,711 206,980 41,354 55,705 514,530 International other revenues (a) — — — (6,746) 6,746 — Total revenues $ 175,780 $ 34,711 $ 206,980 $ 34,608 $ 62,451 $ 514,530 Reportable Segments Six Months Ended June 30, 2024 Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total Company-owned restaurant sales $ 349,431 $ — $ — $ 26,460 $ — $ 375,891 Franchise royalties and fees — 72,196 — 23,599 — 95,795 Commissary sales — — 501,054 30,350 — 531,404 Other revenues — — — 12,811 134,519 147,330 Eliminations — (2,090) (99,570) — (26,950) (128,610) Total segment revenues 349,431 70,106 401,484 93,220 107,569 1,021,810 International other revenues (a) — — — (12,811) 12,811 — Total revenues $ 349,431 $ 70,106 $ 401,484 $ 80,409 $ 120,380 $ 1,021,810 Reportable Segments Six Months Ended June 25, 2023 Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total Company-owned restaurant sales $ 355,646 $ — $ — $ 3,018 $ — $ 358,664 Franchise royalties and fees — 72,860 — 24,687 — 97,547 Commissary sales — — 522,949 39,235 — 562,184 Other revenues — — — 13,987 148,729 162,716 Eliminations — (2,077) (103,403) (869) (33,183) (139,532) Total segment revenues 355,646 70,783 419,546 80,058 115,546 1,041,579 International other revenues (a) — — — (13,987) 13,987 — Total revenues $ 355,646 $ 70,783 $ 419,546 $ 66,071 $ 129,533 $ 1,041,579 ___________________________________ (a) Other revenues as reported in the Condensed Consolidated Statements of Operations include $6.8 million and $12.8 million of revenues for the three and six months ended June 30, 2024, respectively, and $6.7 million and $14.0 million of revenues for the three and six months ended June 25, 2023, respectively, that are part of the International reporting segment. These amounts include marketing fund contributions and sublease rental income from international franchisees in the United Kingdom that provide no significant contribution to income before income taxes but must be reported on a gross basis under accounting requirements. The related expenses for these Other revenues are reported in Other expenses in the Condensed Consolidated Statements of Operations. |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Aug. 02, 2024 USD ($) asset | Jul. 01, 2024 franchise | Jun. 30, 2024 USD ($) market franchise restaurant | Jun. 30, 2024 USD ($) market restaurant | Jun. 30, 2024 USD ($) market restaurant | Dec. 31, 2023 USD ($) | Jun. 25, 2023 restaurant | Sep. 14, 2021 | |
Significant Account Policies [Line Items] | ||||||||
Percentage of domestic restaurants franchised | 85% | 85% | 85% | |||||
Assets held for sale | $ 4,205 | $ 4,205 | $ 4,205 | $ 0 | ||||
Operating segments | Domestic Company-owned restaurants | ||||||||
Significant Account Policies [Line Items] | ||||||||
Number of operating markets with indicators of impairment | market | 1 | 1 | 1 | |||||
Impairment of property and equipment | $ 3,300 | $ 3,300 | ||||||
Impairment of intangible assets | 700 | 700 | ||||||
International Transformation Plan | ||||||||
Significant Account Policies [Line Items] | ||||||||
Number of franchises sold | franchise | 40 | |||||||
Subsequent Event | ||||||||
Significant Account Policies [Line Items] | ||||||||
Number of QC centers sold in sale-leaseback | asset | 2 | |||||||
Subsequent Event | International Transformation Plan | ||||||||
Significant Account Policies [Line Items] | ||||||||
Number of franchises sold | franchise | 20 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Domestic QC Centers | Subsequent Event | ||||||||
Significant Account Policies [Line Items] | ||||||||
Purchase price for sale of assets | $ 46,700 | |||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Domestic QC Centers | ||||||||
Significant Account Policies [Line Items] | ||||||||
Assets held for sale | $ 3,400 | 3,400 | 3,400 | |||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Certain UK assets of company-owned restaurants | ||||||||
Significant Account Policies [Line Items] | ||||||||
Assets held for sale | $ 800 | 800 | $ 800 | |||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Certain UK assets of company-owned restaurants | International Transformation Plan | ||||||||
Significant Account Policies [Line Items] | ||||||||
Remeasurement loss on transfer to held for sale | $ 600 | |||||||
Senior notes | ||||||||
Significant Account Policies [Line Items] | ||||||||
Interest rate | 3.875% | 3.875% | 3.875% | 3.875% | ||||
Corporate Joint Venture | ||||||||
Significant Account Policies [Line Items] | ||||||||
Number of restaurants | restaurant | 98 | 98 | 98 | 98 |
Significant Accounting Polici_5
Significant Accounting Policies - Net Income Attributable to Joint Ventures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Noncontrolling Interest [Line Items] | ||||
Nonredeemable noncontrolling interests | $ 202 | $ 32 | $ 381 | $ 156 |
Total net income | 12,243 | 17,768 | 26,879 | 40,144 |
Corporate Joint Venture | ||||
Noncontrolling Interest [Line Items] | ||||
Papa John’s International, Inc. | 739 | 228 | 1,331 | 625 |
Redeemable noncontrolling interests | 91 | 59 | 190 | 105 |
Nonredeemable noncontrolling interests | 202 | 32 | 381 | 156 |
Total net income | $ 1,032 | $ 319 | $ 1,902 | $ 886 |
Significant Accounting Polici_6
Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash surrender value of life insurance policies | $ 29,349 | $ 29,449 |
Interest rate swaps | 0 | 0 |
Financial liabilities: | ||
Interest rate swaps | 0 | |
Fair Value | Level 2 | ||
Financial assets: | ||
Cash surrender value of life insurance policies | 0 | 0 |
Interest rate swaps | 364 | 107 |
Financial liabilities: | ||
Interest rate swaps | 483 | |
Fair Value | Level 3 | ||
Financial assets: | ||
Cash surrender value of life insurance policies | 0 | 0 |
Interest rate swaps | 0 | 0 |
Financial liabilities: | ||
Interest rate swaps | 0 | |
Carrying Value | ||
Financial assets: | ||
Cash surrender value of life insurance policies | 29,349 | 29,449 |
Interest rate swaps | $ 364 | 107 |
Financial liabilities: | ||
Interest rate swaps | $ 483 |
Significant Accounting Polici_7
Significant Accounting Policies - Fair Value Disclosure (Details) - Senior notes - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Sep. 14, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate | 3.875% | 3.875% | |
Carrying Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
3.875% Senior Notes | $ 400,000 | $ 400,000 | |
Level 2 | Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
3.875% Senior Notes | $ 353,000 | $ 352,500 |
Significant Accounting Polici_8
Significant Accounting Policies - Rollforward of the Allowance for Credit Losses for Accounts Receivable and Notes Receivable (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 25, 2023 | |
Accounts Receivable | ||
Current period provision for expected credit losses, net | $ 2,397 | $ 595 |
Accounts Receivable | ||
Accounts Receivable | ||
Balance at beginning of period | 8,353 | |
Current period provision for expected credit losses, net | 1,073 | |
Write-offs charged against the allowance | (1,181) | |
Balance at end of period | 8,245 | |
Notes Receivable | ||
Notes Receivable | ||
Balance at beginning of period | 16,092 | |
Current period provision for expected credit losses, net | 1,324 | |
Write-offs charged against the allowance | 0 | |
Balance at end of period | $ 17,416 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) restaurant lease | Jun. 25, 2023 USD ($) | Jun. 30, 2024 USD ($) restaurant lease | Jun. 25, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Sublease income | $ 2.1 | $ 2.7 | $ 4.4 | $ 5.6 |
Number of domestic leases for which the Company is contingently liable | lease | 47 | 47 | ||
Estimated maximum amount of undiscounted payments in the event of nonpayment by primary lessees | $ 6.6 | $ 6.6 | ||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Initial term of franchise subleases | 5 years | 5 years | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Initial term of franchise subleases | 10 years | 10 years | ||
United Kingdom franchise-owned restaurants | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of units leased and subleased | restaurant | 350 | 350 | ||
Initial lease terms on franchised sites | 15 years | 15 years |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 25, 2023 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from finance leases | $ 759 | $ 702 |
Financing cash flows from finance leases | 4,796 | 3,669 |
Operating cash flows from operating leases | 19,710 | 18,738 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 2,988 | 14,129 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 14,343 | 12,128 |
Cash received from sublease income | $ 3,355 | $ 5,278 |
Papa John's Marketing Fund, I_3
Papa John's Marketing Fund, Inc. (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 24,305 | $ 40,587 |
Accounts receivable, net | 93,460 | 104,244 |
Prepaid expenses and other current assets | 58,762 | 42,285 |
Total current assets | 225,740 | 231,018 |
Total assets | 838,427 | 875,005 |
Current liabilities: | ||
Accounts payable | 63,731 | 74,949 |
Accrued expenses and other current liabilities | 149,673 | 158,167 |
Current portion of long-term debt | 2,375 | 0 |
Current deferred revenue | 19,941 | 20,427 |
Total current liabilities | 275,219 | 304,596 |
Deferred revenue | 19,011 | 20,366 |
Total liabilities | 1,283,592 | 1,317,770 |
Papa John's Marketing Fund Inc. | ||
Current assets: | ||
Cash and cash equivalents | 4,547 | 5,494 |
Accounts receivable, net | 15,530 | 18,026 |
Prepaid expenses and other current assets | 12,181 | 2,223 |
Total current assets | 32,258 | 25,743 |
Deferred income taxes | 674 | 674 |
Total assets | 32,932 | 26,417 |
Current liabilities: | ||
Accounts payable | 0 | 1,509 |
Accrued expenses and other current liabilities | 32,268 | 22,245 |
Current portion of long-term debt | 2,375 | 0 |
Current deferred revenue | 3,701 | 4,327 |
Total current liabilities | 38,344 | 28,081 |
Deferred revenue | 2,021 | 2,627 |
Total liabilities | $ 40,365 | $ 30,708 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | Dec. 31, 2023 | |
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized related to deferred revenue and customer loyalty program | $ 8,200 | $ 7,900 | $ 16,300 | $ 16,300 | |
Contract Liabilities | |||||
Beginning balance | 40,793 | ||||
Ending balance | 38,952 | 38,952 | |||
Change | (1,841) | ||||
Contract assets | 12,200 | 12,200 | $ 7,900 | ||
Amortization expense related to contract assets | 1,400 | $ 900 | 2,600 | $ 1,800 | |
Franchise fee liabilities | |||||
Contract Liabilities | |||||
Beginning balance | 20,564 | ||||
Ending balance | 20,065 | 20,065 | |||
Change | (499) | ||||
Unredeemed gift card liabilities | |||||
Contract Liabilities | |||||
Beginning balance | 6,955 | ||||
Ending balance | 5,722 | 5,722 | |||
Change | (1,233) | ||||
Customer loyalty program obligations | |||||
Contract Liabilities | |||||
Beginning balance | 13,274 | ||||
Ending balance | $ 13,165 | 13,165 | |||
Change | $ (109) |
Revenue Recognition - Transacti
Revenue Recognition - Transaction Price Allocated to Remaining Performance Obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract liabilities | $ 38,952 | $ 40,793 |
Franchise fees | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | 16,800 | |
Contract liabilities | 20,065 | $ 20,564 |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 2,990 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-06-30 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 2,609 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-06-29 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 2,426 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-06-28 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 2,190 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-06-26 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 1,957 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-06-25 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 4,628 | |
Remaining performance obligation period | ||
Area development fees | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract liabilities | $ 3,300 |
Common Stock - Share Authorized
Common Stock - Share Authorized and Outstanding (Details) - shares shares in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Equity [Abstract] | ||
Common stock authorized (in shares) | 100 | 100 |
Common stock outstanding (in shares) | 32.6 | 32.5 |
Common Stock - Share Repurchase
Common Stock - Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 01, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | Oct. 28, 2021 | |
Class of Stock [Line Items] | ||||||
Total number of shares purchased (in shares) | 0 | 0 | 0 | 2,523,000 | ||
Average price paid per share (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 83.10 | ||
Aggregate cost of shares purchased, excluding transaction costs | $ 0 | $ 0 | $ 0 | $ 209,640 | ||
Maximum dollar value of shares that may yet be purchased under the plans or programs | $ 90,160 | $ 90,160 | $ 90,160 | 90,160 | ||
Aggregate cost of shares purchased | 212,444 | |||||
Transaction costs on share repurchases | 2,804 | |||||
Transaction costs on share repurchases classified as non-cash financing activities | $ 2,100 | |||||
Starboard | Related Party | ||||||
Class of Stock [Line Items] | ||||||
Total number of shares purchased (in shares) | 2,176,928 | |||||
Average price paid per share (in dollars per share) | $ 82.52 | |||||
Aggregate cost of shares purchased | $ 179,600 | |||||
Common stock repurchase program | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 425,000 |
Common Stock - Dividends (Detai
Common Stock - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2024 | Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Subsequent Event [Line Items] | |||||
Dividends paid | $ 30,212 | $ 28,485 | |||
Dividends declared per common share (in dollars per share) | $ 0.46 | $ 0.42 | $ 0.92 | $ 0.84 | |
Dividends declared on common stock | $ 15,019 | $ 13,822 | $ 30,042 | $ 28,485 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.46 | ||||
Dividends declared on common stock | $ 15,200 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Earnings Per Share [Abstract] | ||||
Basic net income available to common stockholders | $ 12,243 | $ 17,768 | $ 26,879 | $ 40,144 |
Diluted net income available to common stockholders | $ 12,243 | $ 17,768 | $ 26,879 | $ 40,144 |
Basic weighted average number of shares (in shares) | 32,730 | 32,563 | 32,688 | 33,359 |
Dilutive effect of outstanding equity awards (in shares) | 123 | 87 | 183 | 128 |
Diluted weighted average number of shares (in shares) | 32,853 | 32,650 | 32,871 | 33,487 |
Basic earnings per common share (in dollars per share) | $ 0.37 | $ 0.55 | $ 0.82 | $ 1.20 |
Diluted earnings per common share (in dollars per share) | $ 0.37 | $ 0.54 | $ 0.82 | $ 1.20 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 377 | 103 | 207 | 49 |
Debt - Summary of Long Term Deb
Debt - Summary of Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Outstanding debt | $ 767,024 | $ 764,000 |
Unamortized debt issuance costs | (5,788) | (6,578) |
Current portion of long-term debt | (2,375) | 0 |
Total long-term debt, net | 758,861 | 757,422 |
Revolving facilities | ||
Debt Instrument [Line Items] | ||
Outstanding debt | 367,024 | 364,000 |
Senior notes | ||
Debt Instrument [Line Items] | ||
Outstanding debt | 400,000 | $ 400,000 |
PJMF Revolving Facility | ||
Debt Instrument [Line Items] | ||
Outstanding debt | 2,400 | |
Current portion of long-term debt | $ (2,400) |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | Dec. 31, 2023 | Sep. 14, 2021 | |
Debt Instrument [Line Items] | |||||||
Current portion of long-term debt | $ 2,375 | $ 2,375 | $ 0 | ||||
Interest paid, including payments made or received under the swaps | $ 5,800 | $ 5,700 | $ 20,400 | $ 16,600 | |||
Senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 400,000 | ||||||
Interest rate | 3.875% | 3.875% | 3.875% | ||||
PJI Revolving Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 600,000 | ||||||
Line of credit facility, remaining borrowing capacity | $ 235,300 | $ 235,300 | |||||
PJI Revolving Facility | Swingline Loan | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 40,000 | ||||||
PJI Revolving Facility | Letter of credit | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 80,000 | ||||||
PJMF Revolving Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 30,000 | ||||||
Interest margin rate on debt | 1.975% | ||||||
Applicable interest rate | 7.30% | ||||||
Current portion of long-term debt | $ 2,400 | $ 2,400 |
Debt - Notional Amounts of Deri
Debt - Notional Amounts of Derivatives (Details) - Designated as hedging instrument - USD ($) $ in Millions | Jun. 30, 2024 | Jun. 23, 2023 | Apr. 30, 2023 |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Floating Rate Debt | $ 100 | $ 125 | |
Interest rate swap one | |||
Derivative [Line Items] | |||
Floating Rate Debt | $ 50 | ||
Fixed Rates | 4.55% | ||
Interest rate swap two | |||
Derivative [Line Items] | |||
Floating Rate Debt | $ 50 | ||
Fixed Rates | 4.55% |
Debt - Location and Amount of D
Debt - Location and Amount of Derivatives in the Financial Statements (Details) - Interest Rate Swap - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets in Prepaid and other current assets | $ 364 | $ 107 |
Derivatives liabilities in Other long-term liabilities | $ 0 | $ 483 |
Debt - Effect of Derivatives on
Debt - Effect of Derivatives on the Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total Net Interest Expense on Condensed Consolidated Statements of Operations | $ (10,896) | $ (11,275) | $ (21,959) | $ (20,296) |
Interest expense | Interest Rate Swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in AOCL on Derivative | 68 | 1,165 | 740 | 1,424 |
Interest expense | Interest Rate Swap | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) or Gain Reclassified from AOCL into Income | $ 197 | $ (36) | $ 397 | $ (243) |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - International Transformation Plan $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jul. 01, 2024 franchise | Jun. 30, 2024 USD ($) franchise | Jun. 30, 2024 USD ($) restaurant | Jun. 30, 2024 USD ($) franchise | |
Restructuring Cost and Reserve [Line Items] | ||||
Number of restaurant closures | restaurant | 43 | |||
Number of franchises sold | franchise | 40 | |||
Loss on sale of franchised stores | $ 1,200 | |||
Number of franchises closed | franchise | 19 | |||
Restructuring related costs | 6,129 | $ 15,652 | ||
Restructuring related costs incurred since commencement of the plan | $ 17,900 | 17,900 | 17,900 | |
Minimum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Estimated pre-tax restructuring related costs | 25,000 | 25,000 | 25,000 | |
Maximum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Estimated pre-tax restructuring related costs | $ 35,000 | 35,000 | $ 35,000 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | Certain UK assets of company-owned restaurants | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Remeasurement loss on transfer to held for sale | $ 600 | |||
Subsequent Event | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of franchises sold | franchise | 20 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Related Costs (Details) - International Transformation Plan - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Jun. 30, 2024 | |
Restructuring Cost and Reserve [Line Items] | ||
Long-lived asset impairment charges | $ 1,422 | $ 8,976 |
Loss on franchisee notes receivable | 1,564 | 1,564 |
Loss on refranchising Company-owned stores | 1,737 | 1,737 |
Operating lease terminations | 306 | 306 |
Total international transformation costs, net | 6,129 | 15,652 |
Professional services and other related costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 1,355 | 2,701 |
Employee termination costs, net | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | (255) | $ 368 |
Restructuring related forfeitures on unvested stock-based compensation awards | $ 100 |
Restructuring - Changes in the
Restructuring - Changes in the Balance of Accrued Expenses Related to Approved Initiatives (Details) - International Transformation Plan $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 1,783 |
Charges | 3,145 |
Payments | (3,920) |
Ending balance | 1,008 |
Employee severance, net | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 1,227 |
Charges | 444 |
Payments | (1,286) |
Ending balance | 385 |
Professional services and other related costs | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 527 |
Charges | 2,701 |
Payments | (2,605) |
Ending balance | 623 |
Other | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 29 |
Charges | 0 |
Payments | (29) |
Ending balance | $ 0 |
Litigation, Commitments and C_2
Litigation, Commitments and Contingencies (Details) $ in Millions | Apr. 14, 2022 USD ($) |
Settled litigation | Papa Johns Employee and Franchise Employee Antitrust Litigation | |
Loss Contingencies [Line Items] | |
Settlement amount | $ 5 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) segment entity | Jun. 25, 2023 USD ($) | |
Revenue, Major Customer [Line Items] | ||
Number of reportable segments | segment | 4 | |
Refranchising and impairment losses | $ | $ 14,713 | $ 0 |
Sales | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, number | entity | 0 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | Dec. 31, 2023 | |
Segment Reporting Information [Line Items] | |||||
Total revenues | $ 507,894 | $ 514,530 | $ 1,021,810 | $ 1,041,579 | |
Total operating income | 28,226 | 34,912 | 61,944 | 72,708 | |
Accumulated depreciation and amortization | (551,830) | (551,830) | |||
Total property and equipment, net | 265,693 | 265,693 | $ 282,812 | ||
Non-cash impairment charges related to fixed and intangible assets | 14,713 | 0 | |||
International Transformation Plan | |||||
Segment Reporting Information [Line Items] | |||||
Restructuring related costs | 6,129 | 15,652 | |||
Domestic Company-owned restaurants | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 173,207 | 175,780 | 349,431 | 355,646 | |
North America franchising | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 34,409 | 34,711 | 70,106 | 70,783 | |
North America commissaries | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 198,197 | 206,980 | 401,484 | 419,546 | |
International | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 39,701 | 34,608 | 80,409 | 66,071 | |
All others | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 62,380 | 62,451 | 120,380 | 129,533 | |
Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 507,894 | 514,530 | 1,021,810 | 1,041,579 | |
Operating segments | Domestic Company-owned restaurants | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 173,207 | 175,780 | 349,431 | 355,646 | |
Total operating income | 4,777 | 6,641 | 15,136 | 13,291 | |
Property and equipment, gross | 261,833 | 261,833 | |||
Non-cash impairment charges related to fixed and intangible assets | 4,000 | 4,000 | |||
Operating segments | North America franchising | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 34,409 | 34,711 | 70,106 | 70,783 | |
Total operating income | 32,409 | 32,111 | 66,120 | 65,511 | |
Operating segments | North America commissaries | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 198,197 | 206,980 | 401,484 | 419,546 | |
Total operating income | 11,403 | 10,397 | 23,738 | 21,127 | |
Property and equipment, gross | 147,643 | 147,643 | |||
Operating segments | International | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 46,547 | 41,354 | 93,220 | 80,058 | |
Total operating income | (2,665) | 3,763 | (8,654) | 10,995 | |
Property and equipment, gross | 25,034 | 25,034 | |||
Re-positioning and transaction costs | 1,300 | 1,300 | |||
Operating segments | International | International Transformation Plan | |||||
Segment Reporting Information [Line Items] | |||||
Restructuring related costs | 6,100 | 15,700 | |||
Operating segments | All others | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 55,534 | 55,705 | 107,569 | 115,546 | |
Total operating income | 2,170 | 1,343 | 5,368 | 4,500 | |
Property and equipment, gross | 137,676 | 137,676 | |||
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | (65,122) | (69,828) | (128,610) | (139,532) | |
Total operating income | (270) | 358 | (524) | 351 | |
Eliminations | North America franchising | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | (1,041) | (1,025) | (2,090) | (2,077) | |
Eliminations | North America commissaries | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | (50,303) | (51,586) | (99,570) | (103,403) | |
Eliminations | International | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | (869) | 0 | (869) | |
Eliminations | All others | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | (13,778) | (16,348) | (26,950) | (33,183) | |
Unallocated corporate expenses | |||||
Segment Reporting Information [Line Items] | |||||
Total operating income | (19,598) | (19,701) | (39,240) | (43,067) | |
Property and equipment, gross | $ 245,337 | $ 245,337 | |||
Severance and related costs | $ 700 | $ 2,000 |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 507,894 | $ 514,530 | $ 1,021,810 | $ 1,041,579 |
Domestic Company-owned restaurants | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 173,207 | 175,780 | 349,431 | 355,646 |
North America franchising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 34,409 | 34,711 | 70,106 | 70,783 |
North America commissaries | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 198,197 | 206,980 | 401,484 | 419,546 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 39,701 | 34,608 | 80,409 | 66,071 |
International | International other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | (6,846) | (6,746) | (12,811) | (13,987) |
All others | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 62,380 | 62,451 | 120,380 | 129,533 |
All others | International other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,846 | 6,746 | 12,811 | 13,987 |
Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 507,894 | 514,530 | 1,021,810 | 1,041,579 |
Operating segments | Company-owned restaurant sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 184,640 | 178,798 | 375,891 | 358,664 |
Operating segments | Franchise royalties and fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 47,593 | 47,932 | 95,795 | 97,547 |
Operating segments | Commissary sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 264,625 | 278,829 | 531,404 | 562,184 |
Operating segments | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 76,158 | 78,799 | 147,330 | 162,716 |
Operating segments | Domestic Company-owned restaurants | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 173,207 | 175,780 | 349,431 | 355,646 |
Operating segments | Domestic Company-owned restaurants | Company-owned restaurant sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 173,207 | 175,780 | 349,431 | 355,646 |
Operating segments | North America franchising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 34,409 | 34,711 | 70,106 | 70,783 |
Operating segments | North America franchising | Franchise royalties and fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 35,450 | 35,736 | 72,196 | 72,860 |
Operating segments | North America commissaries | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 198,197 | 206,980 | 401,484 | 419,546 |
Operating segments | North America commissaries | Commissary sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 248,500 | 258,566 | 501,054 | 522,949 |
Operating segments | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 46,547 | 41,354 | 93,220 | 80,058 |
Operating segments | International | Company-owned restaurant sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,433 | 3,018 | 26,460 | 3,018 |
Operating segments | International | Franchise royalties and fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 12,143 | 12,196 | 23,599 | 24,687 |
Operating segments | International | Commissary sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 16,125 | 20,263 | 30,350 | 39,235 |
Operating segments | International | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,846 | 6,746 | 12,811 | 13,987 |
Operating segments | All others | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 55,534 | 55,705 | 107,569 | 115,546 |
Operating segments | All others | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 69,312 | 72,053 | 134,519 | 148,729 |
Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | (65,122) | (69,828) | (128,610) | (139,532) |
Eliminations | North America franchising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | (1,041) | (1,025) | (2,090) | (2,077) |
Eliminations | North America commissaries | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | (50,303) | (51,586) | (99,570) | (103,403) |
Eliminations | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | (869) | 0 | (869) |
Eliminations | All others | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ (13,778) | $ (16,348) | $ (26,950) | $ (33,183) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | 3 Months Ended | |
Aug. 02, 2024 USD ($) asset renewal_option | Sep. 29, 2024 USD ($) | |
Subsequent Event [Line Items] | ||
Number of QC centers sold in sale-leaseback | asset | 2 | |
Sale-leaseback lease term | 17 years | |
Number of renewal options for sale-leaseback | renewal_option | 2 | |
Sale-leaseback lease renewal term | 5 years | |
Percentage annual increase in rent for sale-leaseback | 2.75% | |
Forecast | Minimum | ||
Subsequent Event [Line Items] | ||
Gain on sale-leaseback | $ 40 | |
Forecast | Maximum | ||
Subsequent Event [Line Items] | ||
Gain on sale-leaseback | $ 42 | |
Texas QC Center | ||
Subsequent Event [Line Items] | ||
Annual rent payments for the first year of sale-leaseback | $ 2 | |
Florida QC Center | ||
Subsequent Event [Line Items] | ||
Annual rent payments for the first year of sale-leaseback | 1 | |
Domestic QC Centers | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||
Subsequent Event [Line Items] | ||
Purchase price for sale of assets | $ 46.7 |