Papa John's International Inc (NASDAQ:PZZA) shares plummeted 5.1% in pre-market trading on Friday following the release of its fourth-quarter 2024 financial results. The company reported a 7% year-over-year decline in total revenues to $531 million, while adjusted operating income fell by $10 million to $37 million, primarily due to lower domestic sales and higher food costs.

The key factors contributing to the stock's pre-market plunge were:

• Global system-wide restaurant sales declined by approximately 8% in constant currency during Q4 2024, primarily due to an additional week of operations in the prior year.
• North America comparable sales dropped 4% in Q4, indicating continued challenges in the domestic market.
• Adjusted operating income margin fell to 7% from 8.3% in 2023, impacted by higher food basket costs, particularly for proteins and cheese.
• The company anticipates pressure on sales and margins to remain in Q1 2025 due to loyalty program enhancements and a value-focused consumer environment.

Despite the near-term challenges, Papa John's highlighted several positive points and initiatives to drive future growth:

• The company launched successful marketing campaigns, such as the 'Meet the Makers' campaign, and revamped its loyalty rewards program to increase engagement.
• Papa John's opened more than 300 new restaurants globally in 2024, including reaching the milestone of 6,000 restaurants.
• The company is investing in its tech stack to enhance the digital customer experience and CRM capabilities, aiming to drive operational efficiency.
• International comparable sales grew 2% year-over-year in Q4, with strong performance in key markets like the UK, Middle East, and Latin America.