By Mark Kalinowski
Published on June 10, 2020 at 12:00 AM
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.
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By Mark Kalinowski
Published on June 8, 2020 at 12:00 AM
After today’s market close, Wendy’s (WEN; Neutral, $22.65) published a business update, including a -1.9% U.S. same-store sales number for May 4-31, and noting that global same-store sales “for the last week of May turned positive in the low-single digit range.” This strongly suggests that U.S. same-store sales were positive the last week of May, as U.S. same-store sales have been running ahead of global same-store sales by roughly 130-140 basis points as of late.
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By Mark Kalinowski
Published on May 12, 2020 at 12:00 AM
With this report, we upgrade our rating on the shares of Domino’s (DPZ) to Buy (from Neutral). Our upgrade is based on multiple factors, including: (1) we raise our Q2E U.S. same-store sales forecast by +190 basis points, to +8.6% — not only above sellside consensus (according to Consensus Metrix) of +6.8%, but also the new “highon-the-sell-side” forecast, (2) this summer’s new U.S. product launch could prove to be a hit, (3) while we are not modeling a meaningful international sales rebound, it could happen as more countries come back on line with their operations (for example, as of late April, only about 70% of Domino’s France stores were back open), (4) Domino’s company-owned stores (which represent about 2% of the worldwide store base, but which we calculate generate approximately 10%-11% of worldwide operating profits) should see their operating margins helped by lower cheese costs over Q2E-Q4E, and (5) while we are not predicting another massive shutdown of stores/lockdown orders/etc. for 6-12 months from now, if COVID-19 issues lead to such a circumstance several months from now — particularly over winter 2020-21; winters are relatively friendlier to respiratory viruses — Domino’s delivery & carryout focused business model should be more resistant than nearly all other business models in the restaurant industry.
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