By Mark Kalinowski
Published on July 30, 2019 at 12:00 AM
After today’s market close, Denny’s (DENN; Buy) reported adjusted Q2 EPS of $0.23, ahead of our $0.18 estimate and sell-side consensus (according to Consensus Metrix) of $0.18. We attribute the EPS beat to some “tax provision benefits” — the Q2 actual (adjusted) tax rate was -1.2%; a more normalized tax rate of approximately 20.0% would have led to an adjusted EPS number of about $0.18, by our calculations.
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By Mark Kalinowski
Published on July 16, 2019 at 12:00 AM
Earlier today, Domino’s (DPZ; Buy) reported second-quarter EPS of $2.19, ahead of our $2.04 forecast and sell-side consensus (according to Consensus Metrix) of $2.02. However, a lower-than-projected tax rate of 12.9% (versus our 20.5% projection and consensus of 19.8%) helped EPS by about $0.20 relative to our forecast. On the other hand, EPS was hampered by about $0.04 related to a loss on the sale of 59 New York City area stores. Taking the tax-rate and refranchising loss issues out, Q2 EPS would have been one cent below our forecast and one cent above sell-side consensus.
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By Mark Kalinowski
Published on June 3, 2019 at 12:00 AM
With this report, we upgrade the shares of Denny’s (DENN) to Buy (from Neutral). Our ratings change is due primarily to improving same-store sales trends in the familydining sector, of which we believe Denny’s has been a beneficiary during Q2. As a result, we increase our Q2E same-store sales forecast for U.S. systemwide Denny’s by +100 basis points, to +2.8%, placing us as the new “high-on-the-sell-side” forecast according to Consensus Metrix data. We are now also 70 basis points above sellside consensus (although we expect consensus to move up a bit once our raised estimate becomes reflected in consensus).
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