On May 7, 2026, Papa Johns announced its Q1 earnings results, and the news wasn’t great. Revenue was down, and while the company still made a profit for the quarter, diluted earnings per share dropped nearly 25% from the previous quarter, missing analyst estimates.
During the company’s earnings call, CEO Todd Penegor was forthright about the dip in sales, saying that the company struggled to get new customers in the door.
Nevertheless, he explained, for the company’s most frequent customers, Papa Johns saw growth. Loyalty members grew in number by nearly 1 million, and on average, they spent 5% more than others per order and made orders twice as often.
Penegor explained what the company is focusing on to try to improve performance: “Our two largest opportunities to gain share are building on our improved value perception and leveraging our rebuilt innovation pipeline to win new customers, elevate our pizza order mix to more premium pizzas, drive add-ons, and expand our total addressable market.”
He went on to explain that the company has focused on adding new menu items that meet untapped demand and removing underperforming items.
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Papa Johns has launched a Toy Story 5-inspired menu
Penegor also announced plans to launch a new menu of pizzas inspired by Toy Story 5, which will hit theaters on June 19.
The new menu offers a range of personal pizzas that come in a themed box. These smaller pizzas are just four slices and are cheaper than some of Papa Johns’ larger pizzas, though the actual ingredients offered on them aren’t anything out of the ordinary.
However, the combination of a smaller personal pizza and a unique Toy Story 5-themed box is clearly meant to entice kids. Additionally, Papa Johns has added a themed game to its mobile app, and playing it unlocks rewards.
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Pop-up stores will offer Papa Johns’ customers a nostalgic experience
The highlight of the announcement, though, was a number of pop-up stores that will offer immersive, themed experiences to customers. The pop-up stores in Los Angeles, London, Seoul, and Madrid will be open for a very limited time in June leading up to the release of Toy Story 5.
Based on the Pizza Planet restaurant from the franchise, these locations will feature imagery that ties into the new movie along with merch and prizes. The pop-up shops will feature claw machines with limited-edition prizes from partners like Crocs and Adidas.
Toy Story 5 might be targeted primarily at kids, but the movie — and the pop-up shops — are also squarely targeted at adults who grew up with the movies. Toy Story originally released in 1995, and no doubt many of the people most excited about this promotion will be Millennial parents who grew up with the series and want to pass their love for it down to their kids.
For Papa Johns, though, these ultra-limited pop-up stores aren’t likely to make a significant dent in the company’s declining performance. Papa Johns stock peaked in November 2021, and it has been on a steady decline ever since. While the company remains profitable, analysts anticipate continued dwindling revenue in the future, regardless of the company’s attempts to turn things around.
Related: Papa Johns sees three alarming shifts in customer behavior