PZZA: Sometimes Dough Rises, Sometimes EPS Estimates Do Too

By Ryan D. Lavender Published on May 27, 2021 at 12:22 PM

Based on Papa John’s recent announcement that it will repurchase/convert all the convertible preferred stock owned by a strategic investor, we raise our full-year 2021E EPS estimate by +15 cents, to $3.00. And, based on this higher anticipated base of earnings coming off of this year — as well as net EPS benefits from the repurchase/conversion in Q1 2022 and the first half of Q2 2022, that did not accrue in Q1 2021 and the first half of Q2 2021 — we take up our full-year 2022E EPS forecast by +15 cents, to $3.40.

YUM: Can KFC Get to ~75,000 Units Worldwide in the Long Run?

By Ryan D. Lavender Published on May 25, 2021 at 12:26 PM

Earlier today, Yum Brands hosted a virtual Analyst Meeting, focused on its KFC business. Management says that in terms of worldwide units, KFC is only about a third of the way to its potential; “we’ll be growing the brand for years.” As of the end of 2020, KFC had 25,000 units, so this statement implies a (very) long-term goal of roughly 75,000 KFC restaurants worldwide.

Pizza Sector: What Same-Store Sales Trends Hint at re: Average Unit Volumes

By Ryan D. Lavender Published on May 24, 2021 at 12:31 PM

Recently, Domino’s, Pizza Hut (owned by Yum Brands [YUM; Neutral, $119.71]), and Papa John’s all reported their Q1 2021 U.S. same-store sales. In this report, we discuss how these same-store sales results — and potential results for full-year 2021 — relate to these three concepts’ average unit volumes (AUVs). We further discuss what this means for the companies, and their stocks.