By Mark Kalinowski
Published on October 27, 2020 at 12:00 AM
After Tuesday’s market close, Denny’s reported adjusted Q3 EPS of +$0.01, which was ahead of our -$0.03 forecast and sell-side consensus (according to Consensus Metrix) of -$0.03. We attribute the Q3 EPS beat largely to higher-than-anticipated company-owned restaurant margins (1.7% actual — or roughly -3% to -4% excluding an approximate “$1.5 million of favorable reserve adjustments and tax credits related to the CARES Act”) vs. our forecast (-6.5% projected). This more than offset higherthan-anticipated G&A/Revenues (19.1% actual vs. our 17.5% estimate) and D&A/ Revenues (5.7% actual vs. 5.3% estimate).
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By Mark Kalinowski
Published on October 30, 2019 at 12:00 AM
Earlier today, Yum Brands (YUM; Buy) reported adjusted Q3 EPS of $0.80 — which included a -$0.15 hit related to the mark-to-market adjustment for Yum’s investment in Grubhub (GRUB; Not Rated). Excluding this GRUB-related adjustment, EPS would have been $0.95, matching our $0.95 forecast, although a penny shy of the sell-side consensus (according to Consensus Metrix) of 0.96.
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By Mark Kalinowski
Published on June 20, 2019 at 12:00 AM
Not too long ago, Papa John’s (PZZA; Buy) filed its Franchise Disclosure Document (FDD) for 2019. In this report, we cite some of the highlights from that document following our review of it, including our review of it in comparison to last year’s Franchise Disclosure Document. For example, we would note that the On-Line Transaction Fee for 2019 is “1.75% of Net Sales via Internet on-line ordering,” as compared to the 2018 FDD which shows that fee as “1.5% of Net Sales via Internet online ordering” at that time. Also, the 2019 FDD shows that — for company-owned restaurants only — food costs represented 29.7% of sales, while labor costs/taxes represented another 21.6% of sales. The average pre-tax cash flow for a companyowned restaurant in 2018 was $131,859, or 12.3% of sales. We maintain our Buy rating on PZZA and note the following:
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