By Rick Hynum
After another dismal quarterly performance, Papa Johns has a new strategy to shore up its faltering sales, dubbed Unbox Better. And deep discounts appear to be essential to the plan.
The No. 4 chain’s downhill slide continued in the third quarter of 2026. Its same-store sales decreased 8.3% from the same quarter in 2025, including a decline of 7.5% at company-owned stores and an 8.5% drop at franchised locations.
Papa Johns’ global system-wide sales came in at $1.15 billion in Q3 2026, a 5.6% decrease from last year’s third quarter.
In a November 5 earnings call, CEO Todd Penegor said the company is ready to rethink its value proposition, noting that Papa Johns previously “chose to protect margin over deep discounting,” which hurt overall transactions.
Aiming once again to turn Papa Johns’ fortunes around, Penegor introduced Unbox Better, calling it “our company-wide blueprint for strengthening our brand, strengthening our system and earning the right to be chosen again and again.” Notably, it’s Papa Johns’ second “new strategy” in less than three years –the previous one, announced in January 2024, was called Back to Better 2.0.
Despite ongoing sales declines, Penegor said Papa Johns now has “a stronger foundation than we have had in years to execute a common vision and accelerate our transformation.”
Similarly to Q2 2026, Papa Johns carryout business was “relatively stronger” than delivery, Penegor told investors, “while our first-party delivery channel remains under the most pressure. We also continue to see the same underlying mix pressure, with single-pie orders, sides and desserts remaining a drag even as orders with multiple pies continue to hold up well.”
As for Unbox Better, Penegor said it’s “built around a simple belief: Customers do not owe us their business. We earn it in every order, every experience, every day.”
The Unbox Better strategy will include:
Reset the value equation. “Value is not simply the lowest price,” Penegor said. “It is what customers receive relative to what they spend, including quality, convenience and trust. In a very promotional category, we chose to protect margin over deep discounting, and transactions declined as a result.” He said Papa Johns is “now sharpening our barbell strategy, pairing the signature products customers crave with price points that drive traffic and conversion.” But, he added, it could take “several quarters” before “customers give us credit for it.”
Focus on the fundamentals. That includes dough optimization, bake consistency, better toppings and presentation. “We are starting now with a systemwide recommitment to those fundamentals,” Penegor said, “and we are pairing it with a new offer that invites customers to come back, try us again and tell us how we did. Their feedback will guide a steady set of product and quality improvements that we will roll out through next year.”
Deepen the customer connection through Papa Rewards. According to Penegor, comp sales for Papa Johns’ loyalty program outperformed non-loyalty sales by 10 percentage points. “Their tickets are 4% higher per order, and they order about twice as often.” The brand will use AI-powered loyalty features to send more relevant offers to customers “and deliver value at the moments that matter.”
On the operations side, Papa Johns plans to reinforce the fundamentals through nationwide training, coaching and clear standards, which includes a continuation of the chain’s oven calibration work.
The company is also testing an AI-driven point-of-sale platform in a small number of locations, “and the early read is encouraging,” he noted. “The new POS allows for more accurate forecasting, better labor scheduling and increased speed and flexibility of deploying offers and promotions” while letting restaurant teams spend more time focusing on making great food and interacting with customers.
Penegor also pointed to the late-April debut of Lou AI, an AI-powered “pizza assistant,” available in Papa Johns’ app, that helps customers choose the right mix of items for a group order. He also touted the chain’s partnership with Walmart Express Delivery, which lets customers order pizza through the retailer’s online shopping app when they buy groceries or other items. Papa Johns became the first national restaurant brand to partner with Walmart on deliveries that are fulfilled entirely from restaurant locations outside Walmart stores.
In a general announcement about the new Unbox Better strategy posted on Papa Johns’ website, Penegor wrote, “We know we don’t have all the answers. In the coming days, we’ll be inviting customers to tell us what they love about Papa Johns, where they can improve and what they’d like to see from us next. What we hear will help guide a steady set of product and quality improvements as we continue this work into next year. We want customers to be part of that process, because Better shouldn’t be something we define for them.”
