Papa Johns new oven toasted sandwiches are cooked in a recalibrated oven. | Photo courtesy of Papa Johns.
One of Todd Penegor’s first priorities after being named Papa Johns CEO in August 2024 was to optimize the menu to focus on core offerings while “paving the way for more impactful products.”
“New menu items resonate with our customers, and our margins work extremely well for the system,” he said during his first earnings call in that role in November 2024.
The stated goal then, as it is now, is to drive more frequency into the business, but some complexities had to be removed first. And so, by February 2025, the company announced that about 10 SKUs had been removed.
“Those were low-hanging opportunities,” Penegor said in February 2025, adding that another handful of cuts were coming within months. “We need to take those rhythm breakers out to really be the best pizza makers in the business and get focused on the core. We’re going to make sure our oven time and temp are set up to make the best pizzas in the business and enable even more creative innovations in the future.”
It is a delicate balance—operational simplicity and innovation. We’ve seen the restaurant industry ramp up menu launches to a record pace in the past two years to try and lure in increasingly selective consumers, but many concepts have compromised service or confused customers in the process and sales and traffic remain soft.
Papa Johns now believes it has found the sweet spot, however. During the first quarter, same-store sales fell 6.4%, primarily driven by declining orders pressured by lower new customer acquisition, Penegor said during the company’s earnings call Thursday before market. But core pizza customers remain strong, and so the company is “working with urgency” to address the opportunity of beefing up the innovation pipeline to win new customers.
Such an effort is also expected to increase the pizza order mix to more premium pizzas, drive add-ons, and expand the total addressable market, Penegor said.
“We are leaning into innovation because newness is critical to winning new customers,” he said.
So far this year, Papa Johns has introduced a new pan pizza and oven-toasted sandwiches.
“Pan pizza filled a critical menu gap developed through extensive consumer research and rigorous testing. Since launch, it has delivered strong repurchase rates, and we plan to build on this momentum throughout the year by driving trial and awareness,” Penegor said.
The oven-toasted sandwiches created a new category for the chain and have since been integrated into its Papa Pairings value offering, which allows customers to mix and match two items, including a medium one-topping pizza, sandwich or order of wings, for $6.99 each.
“We’re encouraged by the early results we’re seeing with sandwiches, driving participation across (lunch and dinner) dayparts, contributing to sales expansion and already exceeding sales of Papadias without complicating our makeline,” Penegor said.
Papadias were removed last month, along with Papa Bites, as part of that simplification effort first outlined in 2025. Penegor said the exchange of Papadias for oven toasted sandwiches has been “overwhelmingly positive.” Indeed, he said Papadias, introduced in 2020, and Papa Bites, launched in late 2022, were the chain’s biggest rhythm breakers and “distracted us from making great food day in and day out.”
The company has worked to simplify operations, beyond just removing SKUs. The pan developed for the pan pizza, for instance, was designed to require just one pass through the oven, which is different than the chain’s previous process.
“That takes the complexity out of how we’ve done it relative to the past. Sandwiches (are) a very easy build with the oven recalibration. Ciabatta bread cooks really well and is a lot simpler than what we were doing with Papadias,” Penegor said. “With the innovation pipeline, we’ve taken some of the friction out of our restaurants.
“Not only have we removed operational complexity, but we are seeing benefits to the brand as we introduce new menu items outside our core pizza.”
Next up for 2026 is the introduction of side items at accessible price points. The goal here is “to encourage customers to look beyond the center of the plate and drive higher ticket increase sales and improve four-wall margins,” Penegor said.
Papa Johns has already introduced cheesy garlic bread as part of this effort, using the same ciabatta bread as the new sandwich lineup.
“This operationally friendly side item is designed to be a strong add-on, increase check and expand non-pizza sales.
This stronger innovation focus is part of the reason Papa Johns reiterated full-year guidance despite a soft first quarter. Penegor said he expects the pan pizza and sandwiches to continue mixing well and to recruit new guests through the second half of the year.
“It starts with a focus on operational excellence and delivering a great product,” Penegor said. “We stepped back as we started to introduce all these new products to make sure that we set our restaurants up for success. It starts with great training and making sure that we’re ready to deliver when new customers show up.”
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