Earlier today, Papa John’s (PZZA; Buy, $98.54) provided what we view as a favorable business update.
Earlier today, Papa John’s (PZZA; Buy, $99.14) reported adjusted Q2 EPS of $0.48, coming in meaningfully above our $0.35 forecast and sell-side consensus of $0.44. We had been concerned that costs related to franchisee assistance — which amounted to a -$0.12 hit in Q2 — would hold back Q2 earnings, but the strength of the business (North American same-store sales up a previously-announced +28.0%) more than made up for this. Built into our Q2E estimate heading into today was an EPS hit of -18 cents related to franchisee assistance, so even specific to Q2, this came in +6 cents better than we expected.
Earlier today, Yum Brands (YUM; Neutral, $94.25) filed an 8-K which included a business update. As a result, we raise our Q2E EPS estimate by +5 cents, to $0.55. Our full-year 2020E EPS forecast goes up by +10 cents, to $3.00. And, given this higher anticipated base of earnings coming off of this year, we raise our 2021E EPS projection by +5 cents, to $3.80.