Papa John's Reports Earnings!

Continues Its Downward Trajectory!

“Cut-to-the-Chase” Members Now Up   220% Potential Profit
On This Options Trade!

by Ian Harvey

August 08, 2018




Papa John's Int'l, Inc. (NASDAQ: PZZA)

A follow-up on a previous recommended put options trade on Papa John's, as well as an article titled “Papa John's – Time To Exit?” This trade was executed by ““Cut-to-the-Chase” Members” of Stock Options Made Easy; with potential profits now at 220%; and more is likely as the path to recovery is in doubt!



The Original Trade……

…….was from……  “Cut-to-the-Chase” Recommendations

- Week Beginning Monday, July 23, 2018 -

The follow-up article…..

…….was..... “Papa John's – Time To Exit?

The Trade……..

Option trade to consider: Buy the PZZA AUG 20 2018 45.000 PUT at approximately $2.00.

The Details……..

When pizza store chain Papa John’s reported earnings after markets closed Tuesday, the stock was already down nearly 3%, at $41.07; and then the company missed revenue and profit estimates and investors quickly bailed on the stock. Shares traded down more than 10% in Wednesday’s premarket session; and in the actual trading session slumped as much as 7 percent on Wednesday hitting a near four-year low, to close at $38.94, down 5.19% on the day; a day after the U.S. pizza chain cut its current-quarter forecast blaming its ongoing tussle with the chain's founder.

The Earnings Report…..

The company's profit came in at $11.79 million, or $0.36 per share. This compares with $23.54 million, or $0.65 per share, in last year's second quarter.

Excluding items, Papa John's International reported adjusted earnings of $15.87 million or $0.49 per share for the period.

Analysts had expected the company to earn $0.54 per share.

The company's revenue for the quarter fell 6.2% to $407.96 million from $434.78 million last year. Analysts were projecting Papa John's to bring in $424.4 million in revenue.

The Future……

The pizza maker also reduced its full-year 2018 guidance to a range of $1.30 to $1.80 per share. Analysts see this figure as being around $2.05 per share for the fiscal year.

Papa John's has been mired in controversy following racist statements from its founder John Schattner, who apologized for his misguided words, but it appears as if his words are costing the company customers.

BTIG analyst Peter Saleh said in a note on Wednesday that the pizza chain is now faced with an uncertain path to recovery as founder Schnatter continues to advocate for more control. The analyst also said that a sale of the pizza chain would be unlikely under these circumstances, despite depressed stock prices.

Chief Executive Officer Steve Ritchie vowed to move beyond the fight with a new advertising and marketing campaign, while also removing Schnatter's image from company promotions.

However, Stifel analyst Chris O'Cull questioned how effective the company's campaign would be, given that Schnatter holds a 30 percent stake in the pizza chain. O'Cull cut his price target to $35 from $38.

Jefferies analysts said any turnaround would take time and that it did not expect same-store sales to turn positive until the second-half of 2019.

The Profits

As I mentioned in the previous article it is very possible that further profit can be made from this put options trade, but as they say, “a bird-in-the-hand is better than two-in-the-bush”.

Now the choices of action become limited……

  • ….. take the profits now, if not executed already,
  • …..take half the profits, and wait to see what happens before expiry, or
  • …..wait until expiry.

So, for “Cut-to-the-Chase” members who managed to execute this trade recommended by Stock Options Made Easy; and took profits directly after the report, a potential profit of 220% would have been made.

Entering the option trade at a cost of $2.00 or less; and now as high as $6.40; one options contract would provide a profit of $440.00; or 220% Potential Profit.


One other strategy to employ could be a new options trade with expectations for a further downturn on the stock price…..

** AN OPTION TRADE CONSIDERATION: Buy PZZA OCT 19 2018 37.500 PUT at approximately $2.20. Sell price is left to your own judgment.

As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, as seen in this scenario as part of the “Cut-to-the-Chase Series”, but during earnings season this strategy has been very profitable.

Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.

Strategies to Consider……

"When To Exit A Trade Based On Earnings?".....READ MORE.....

"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.

……continue reading this article……

Our proven track record says it all!!

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Other Options…….

If you interested in "Earnings Predictions" just click here……

or "Mentorship Program" here....

Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.

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