Papa Murphy's (FRSH) Tops Q2 EPS by 1c, Sees FY Comp Decline of 2%-3%

Papa Murphy's (NASDAQ: FRSH) reported Q2 EPS of $0.06, $0.01 better than the analyst estimate of $0.05. Revenue for the quarter came in at $29.9 million versus the consensus estimate of $33.44 million.

Domestic system comparable store sales compared with the second quarter of 2015 decreased by 4.0%, including a 3.7% decrease at domestic franchisee-owned stores and a 6.6% decrease at company-owned stores.

2016 Financial Outlook

Based on current information, Papa Murphy’s Holdings, Inc. is updating full year guidance for fiscal year 2016, which ends on January 2, 2017.

• Domestic system-wide comparable store sales decline of approximately 2.0% to 3.0%, including a comparable store sale decline of approximately 3% in the third-quarter, compared to previous full year guidance of comparable store sale growth of flat to +1.0%;
• Domestic new store openings of between 115 and 120 units, including about 25 company-owned exclusive of any pre-sale development stores opened and held by the company at year-end;
• Revenue to include transaction fees from franchisees for use of the new on-line ordering platform of approximately $0.7 million and zero-margin POS License revenue of approximately $0.7 million, compared to previous guidance of transaction fee income of approximately $1.7 million and zero-margin POS License revenue of approximately $2.1 million;
• Selling, general and administrative expenses of approximately $28.0 million to $29.0 million, inclusive of operating costs of approximately $1.4 million associated with the new on-line ordering platform and approximately $0.7 million associated with POS licenses resold to franchise-owners at cost, compared to previous guidance totaling $33.0 million to $34.0 million, inclusive of operating costs of approximately $3.1 million associated with the new on-line ordering platform and approximately $2.1 million associated with POS licenses resold to franchise-owners at cost;
• Pre-opening costs associated with new company and unsold pre-sale development stores, net of recoveries associated with pre-sale development sales, of approximately $1.0 million to $1.2 million, compared to previous guidance of approximately $0.9 million for new company stores;
• Capital expenditures, including acquisitions and divestitures of approximately $15.0 million to $17.0 million, compared to previous guidance of approximately $13.0 million to $15.0 million;
• Expected full-year effective tax rate of approximately 39.5%, compared to previous guidance of 38.5%; and
• Diluted share-count of approximately 16.8 million, compared to previous guidance of 17.0 million.

For earnings history and earnings-related data on Papa Murphy's (FRSH) click here.

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