Papa John's International, Inc.

Thank you for standing by and welcome to Papa John's third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Stacey Froehlich, Vice President of Investor Relations. Please. Go ahead.

Good morning and welcome to our third quarter 2024 earnings conference call. This morning we issued our third quarter earnings release. A copy of the release can be obtained on our investor relations website at ir.papajohns.com under the news release tab or by contacting our investor relations department at investor underscore relations at papajohns.com. Joining me on the call this morning are Todd Penegor, our President and Chief Executive Officer, and Robby Sannawalla, our Chief Financial Officer and Executive Vice President, International. Before we begin, I need to remind you that comments made during this call will include forward-looking statements within the meaning of the Federal Securities Law. These statements may involve risks and uncertainty that could cause actual results to differ materially from these statements. Forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our SEC filing. In addition, please refer to the earnings release for the required reconciliation of non-GAAP financial measures discussed on today's call. Lastly, let me thank you in advance for asking only one question and getting back in the queue for more follow-ups. And now let me turn the call over to Todd.

Thank you, Stacey, and good morning, everyone. Since joining Papa John's in August, I've had the opportunity to meet with a significant number of our franchisees and team members around the globe. I've also engaged with many of our analysts and investors. These interactions have provided a deeper understanding of our customer needs, organizational structure, and operating model. It is clear we have opportunities to improve execution and profitability. We have work to do, but based on my experience in the industry and my learnings of the company thus far, I am confident that Papa John's has what it takes to be the best pizza makers in QSR and to create significant, sustainable shareholder value over the long term. Already, we have made progress in bringing on new team members who have the right skills and expertise to help us compete and win. Kevin Vesconi joined us in September as Papa John's new Chief Digital and Technology Officer. Kevin and I worked together at the Wendy's Company. where I experienced firsthand his ability to lead technology innovation that delivered significant impact for our customers, team members, and franchisees. This morning, we also announced that Jenna Bromberg will be joining Papa John's as our Chief Marketing Officer. Jenna is an experienced marketing leader in the restaurant, franchising, and retail industry. She has been recognized for her transformative brand campaigns and deep consumer insights. Our teams will surely benefit from her unique blend of quick service restaurant and modern retail marketing expertise that she brings to this role. Kevin and Jenna are a strong complement to the proven leaders we have within the company, including Ravi, who in addition to serving as CFO, will now be responsible for Papa John's international business, and Joe Seavey, who in addition to serving as Chief Restaurant and North America Development Officer, will now be responsible for overseeing all global development, as well as corporate and franchise restaurant operations. By adding industry expertise and enhancing our bench strength, we are bringing fresh insights and energy to our leadership team. As previously announced, we will be hosting an analyst and investor meeting on December the 12th, where I will share insights and learnings from my first 100 days at Papa John's and our journey ahead. This will also provide an opportunity for the investor community to interact with our executive management team while tasting pizzas from around the world. While I'm looking forward to a more detailed discussion on December the 12th, I'd like to share some initial observations today. First, starting with our North America business. We must accelerate profitable growth in our restaurant system, and we'll get there through five key elements. First, relentlessly focusing on our core product proposition. and improving innovation across the barbell. Traditional superior quality pizza is the foundation of our success. Consumers know us for better ingredients, better pizza, and we need to deliver on this promise consistently every day to every customer across every restaurant. Additionally, we must win the hearts and stomachs of customers with craveable menu items across occasions and value offers. Work is underway on core menu optimization to pave the way for more impactful product offerings. We need to make sure we deliver on our core menu offerings. New menu items resonate with our customers and our margins work extremely well for the system. Second, amplifying our marketing message to drive customer consideration and call to action across target segments. Our Better Get You Some campaign that was launched earlier this year has traction, but we must enhance the message why consumers should choose Papa John's and highlight our pizza craftsmanship. Third, Investing in modernizing our tech stack to enable commercial and operational efficiency through improvements in the end-to-end digital customer experience and our customer relationship management platform. We need to make it easier for our customers and franchisees to do business. As noted, Kevin has an outstanding record of delivering innovation that drives sales, and I'm confident that he will do so at Papa John's as well. Fourth, differentiating our customer experience. to meet and exceed the convenience, value, and quality expectations of our customer's channel of choice. By simplifying our processes, optimizing our menu, and employing technology, our teams will be set up to be the best pizza makers in the business while delivering exceptional experiences regardless of the order and delivery channels. Our Papa Rewards loyalty program is a great example of how we can evolve our customer experience in the near term while investing in and building capabilities over the longer term to enhance the lifetime value of customers ordering from Papa John's. Today, roughly one quarter of our active program members have not yet reached a reward due to the current thresholds. In the fourth quarter, we will allow members to unlock Papa Do faster, activating our members at higher rates to help drive transactions and frequency. The construct of the program is simple. We believe that converting points to Papa Do in smaller increments to members can unlock rewards faster for more immediate customer gratification. This is just the first step as we plan to make further improvements to our loyalty program. We understand the importance of building a program that innovates ahead of the category. Our loyalty program must be flexible and easy to understand to create strong, emotionally connected consumer engagement that seamlessly integrates with our creative, paid, earned, and owned messaging. We see so much opportunity here with the greatest impact to come from more quickly driving that all important second purchase and shrinking the number of days it takes for future visits to occur. It is critical that we take the time needed and make the proper investment to develop and launch a long-term structure that will deliver the rewards our customers deserve with unique brand experiences that matter to them while maintaining a strong focus on acquiring new loyalty members. Finally, partnering with and evolving our franchisee base to be growth-oriented, focusing on increasing our market share through strategic new restaurant development and priority markets. From a development perspective, the North American market is our most secretive development opportunity, and we remain committed to accelerating the expansion of our domestic footprint moving forward. Our teams have made substantial progress this year in identifying real-time cost savings throughout the development process, which enhances the value proposition for franchisees to expand their portfolio. Through these efforts, we now anticipate our remaining company-owned restaurant openings in 2024 will have an average build cost of approximately $500,000, excluding marketing incentives, and we are continuing to look for opportunities to further reduce these costs in the future. I'll have more details on how we specifically plan to deliver against this roadmap in December, but want to underscore that we're acting with urgency. We are laser focused on strengthening our foundation in the near term while positioning the company to capitalize on opportunities to drive success and value creation over the long term. Next, looking at our international business. Our international strategy requires a narrower and deeper focus on the most impactful territories to fuel growth and create long-term earnings power. Simply put, international is not a large generic market. we see it as a collection of markets that we will target with an informed, consumer-centric mindset. The establishment of regional restaurant support centers and the hiring of experienced leaders to create holistic strategies within their markets has helped to align global best practices in operations, marketing, and technology with local preferences and needs. In China, we are focused on establishing a sustainable operating model to accelerate growth in this important global market. Korea and Spain are well-established markets with a solid foundation that we can continue to build on to drive long-term growth through product innovation, operational excellence, and new restaurant development to improve penetration and accessibility. In Latin America, we continue to build on our strong market share and remain focused on being the brand of choice. I've had the opportunity to travel to the UK this quarter with Ravi and several others, and we're incredibly proud of the work that has been done in this market over the past year. This progress is a great example of the power of focus and teamwork. We've learned a lot through this process and gained tools that we can use in the future, both in the UK and in other markets. Their innovation pipeline is robust, insights-driven and consumer-led, supported by a strong marketing focus. I'm excited to see how these markets and our international presence will grow under Ravi's leadership and look forward to building upon this momentum. Over the past three months, my conviction in Papa John's has only grown stronger. We are refining our strategic priorities and re-energizing our team members and franchisees as we position ourselves to make the restaurant system better and more effective. We are committed to making strategic investments that will enable us to build for the future propel durable growth and value creation, and help ensure consumers have us as their top choice and their consideration set. We are working with urgency to strengthen the business in the near term, while also working to position Papa John's for long-term success and category leadership with a challenger brand mindset. And with that, I'd like to turn it over to Ravi to discuss our third quarter results. Ravi?