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Wendy's Q3 Earnings Match Estimates, Revenues Up Year Over Year
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The Wendy’s Company (WEN - Free Report) reported third-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. On a year-over-year basis, the top line rose while the bottom line declined. Solid same-restaurant sales, strength in U.S. breakfast sales and digital sales momentum aided the company’s performance.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company continues to focus on industry-leading quality, innovation and value. WEN aims to maintain a customer-first approach while driving its restaurant economic model throughout the year and beyond.
WEN’s Q3 Earnings & Revenues
WEN reported adjusted earnings per share (EPS) of 25 cents, in line with the Zacks Consensus Estimate. In the prior-year quarter, it reported adjusted EPS of 27 cents.
Revenues of $566.7 million topped the consensus mark of $558.9 million. Also, the top line inched up 2.9% on a year-over-year basis on the back of increased revenues from advertising funds, franchise royalties and franchise fees. However, this growth was somewhat countered by a decline in sales from company-operated restaurants.
The Wendy's Company Price, Consensus and EPS Surprise
Same-restaurant sales at international restaurants (excluding Argentina) rose 0.7% year over year compared with 7.8% a year ago. Our estimate was pegged at 2.2%.
Comps at global restaurants inched up 0.2% year over year compared with 2.8% in the prior-year quarter. Comps in the United States registered a 0.2% year-over-year improvement compared with 2.2% in the year-ago quarter.
In the quarter under review, Wendy’s inaugurated 64 restaurants globally, marking an increase of 31 net new units.
WEN's System-Wide Sales Discussion
In the reported quarter, global system-wide sales, including company-operated and franchise restaurants, rose 1.8% year over year. System-wide sales in the United States and International segments were up 0.9% and 7.7% year over year, respectively.
Operating Highlights of Wendy’s
In the quarter under review, the company-operated restaurant margin came in at 16.5%, flat year over year. The impact of higher labor costs and reduced customer count was offset by an increased average check and labor efficiencies.
General and administrative expenses were $62.8 million compared with $59.3 million a year ago. The upside was caused by increased employee compensation and benefits and a rise in professional fees. This was partially offset by a decrease in incentive compensation accruals. We projected the metric to be $64 million.
Quarterly operating profit amounted to $94.7 million, down 6.8% from the year-ago levels. The downside was caused by incremental investment in breakfast advertising and higher depreciation. However, this was partially offset by higher franchise royalty revenues, other operating income and franchise net rental income.
Net income was $50.2 million, down 13.4% from $58 million in the year-ago quarter.
Adjusted EBITDA totaled $135.2 million, down 2.9% from $139.2 million in the prior-year quarter. Our estimate for the metric was $136.9 million.
WEN’s Balance Sheet
Cash and cash equivalents as of Sept. 29, 2024, totaled $482.2 million compared with $516 million on Dec. 31, 2023. Inventories at the end of the fiscal third quarter amounted to $6.3 million compared with $6.7 million as of Dec. 31, 2023. As of Sept. 29, 2024, long-term debt was $2.72 billion compared with $2.73 billion at the end of December 2023.
Management declared a quarterly dividend of 25 cents per share. The dividend will be paid out on Dec. 16, 2024, to its shareholders on record as of Dec. 2.
WEN’s 2024 Outlook Revised
For 2024, WEN expects global system-wide sales to grow around 3% compared with the prior estimate of 3-5%. Adjusted EBITDA is still predicted in the band of $535-$545 million.
Adjusted EPS for 2024 is anticipated to be between 99 cents and $1.01 compared with the prior estimate of 98 cents to $1.02. The Zacks Consensus Estimate is pegged at 98 cents.
The company expects cash flow from operations in the band of $365-$385 million. Capital expenditures are anticipated to be between $90 million and $100 million. Free cash flow is expected in the range of $275-$285 million.
Shake Shack Inc. (SHAK - Free Report) posted third-quarter fiscal 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. Both top and bottom lines also increased on a year-over-year basis. The company ramped up its investment in marketing strategies and programs aimed at increasing guest engagement and brand awareness, even amid a challenging market environment. These efforts have paid off, as the company has achieved some of the highest brand awareness levels on record, which, in turn, is fueling robust sales and profitability growth.
SHAK’s fiscal third-quarter adjusted EPS came in at 25 cents, which beat the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, the company reported adjusted EPS of 17 cents. Quarterly revenues of $316.9 million beat the consensus mark of $315 million. The top line increased 14.7% on a year-over-year basis.
BJ's Restaurants, Inc. (BJRI - Free Report) reported third-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Both top and bottom lines increased on a year-over-year basis.
The company reported an adjusted loss per share of 13 cents, missing the Zacks Consensus Estimate of 3 cents. In the year-ago quarter, it recorded an adjusted loss per share of 16 cents. Total revenues of $325.7 million beat the consensus mark by 0.04%. The top line inched up 2.2% year over year. This upside was backed by strong guest traffic and Pizookie Meal Deal performance.
Chipotle Mexican Grill, Inc. (CMG - Free Report) reported mixed third-quarter 2024 results, with earnings beating the Zacks Consensus Estimate for the seventh consecutive quarter but revenues missing the same after beating in the preceding four quarters. . CMG reported adjusted EPS of 27 cents, outpacing the Zacks Consensus Estimate of 25 cents. The bottom line increased 17.4% from 23 cents reported in the year-ago quarter. Quarterly revenues of $2,793.6 million missed the consensus mark of $2,817 million. However, the top line rose 13% on a year-over-year basis. This upside was driven by strong comparable restaurant sales growth, backed by higher transactions of 3.3% as well as a 2.7% rise in average check.
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Wendy's Q3 Earnings Match Estimates, Revenues Up Year Over Year
The Wendy’s Company (WEN - Free Report) reported third-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. On a year-over-year basis, the top line rose while the bottom line declined. Solid same-restaurant sales, strength in U.S. breakfast sales and digital sales momentum aided the company’s performance.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company continues to focus on industry-leading quality, innovation and value. WEN aims to maintain a customer-first approach while driving its restaurant economic model throughout the year and beyond.
WEN’s Q3 Earnings & Revenues
WEN reported adjusted earnings per share (EPS) of 25 cents, in line with the Zacks Consensus Estimate. In the prior-year quarter, it reported adjusted EPS of 27 cents.
Revenues of $566.7 million topped the consensus mark of $558.9 million. Also, the top line inched up 2.9% on a year-over-year basis on the back of increased revenues from advertising funds, franchise royalties and franchise fees. However, this growth was somewhat countered by a decline in sales from company-operated restaurants.
The Wendy's Company Price, Consensus and EPS Surprise
The Wendy's Company price-consensus-eps-surprise-chart | The Wendy's Company Quote
Same-restaurant sales at international restaurants (excluding Argentina) rose 0.7% year over year compared with 7.8% a year ago. Our estimate was pegged at 2.2%.
Comps at global restaurants inched up 0.2% year over year compared with 2.8% in the prior-year quarter. Comps in the United States registered a 0.2% year-over-year improvement compared with 2.2% in the year-ago quarter.
In the quarter under review, Wendy’s inaugurated 64 restaurants globally, marking an increase of 31 net new units.
WEN's System-Wide Sales Discussion
In the reported quarter, global system-wide sales, including company-operated and franchise restaurants, rose 1.8% year over year. System-wide sales in the United States and International segments were up 0.9% and 7.7% year over year, respectively.
Operating Highlights of Wendy’s
In the quarter under review, the company-operated restaurant margin came in at 16.5%, flat year over year. The impact of higher labor costs and reduced customer count was offset by an increased average check and labor efficiencies.
General and administrative expenses were $62.8 million compared with $59.3 million a year ago. The upside was caused by increased employee compensation and benefits and a rise in professional fees. This was partially offset by a decrease in incentive compensation accruals. We projected the metric to be $64 million.
Quarterly operating profit amounted to $94.7 million, down 6.8% from the year-ago levels. The downside was caused by incremental investment in breakfast advertising and higher depreciation. However, this was partially offset by higher franchise royalty revenues, other operating income and franchise net rental income.
Net income was $50.2 million, down 13.4% from $58 million in the year-ago quarter.
Adjusted EBITDA totaled $135.2 million, down 2.9% from $139.2 million in the prior-year quarter. Our estimate for the metric was $136.9 million.
WEN’s Balance Sheet
Cash and cash equivalents as of Sept. 29, 2024, totaled $482.2 million compared with $516 million on Dec. 31, 2023. Inventories at the end of the fiscal third quarter amounted to $6.3 million compared with $6.7 million as of Dec. 31, 2023. As of Sept. 29, 2024, long-term debt was $2.72 billion compared with $2.73 billion at the end of December 2023.
Management declared a quarterly dividend of 25 cents per share. The dividend will be paid out on Dec. 16, 2024, to its shareholders on record as of Dec. 2.
WEN’s 2024 Outlook Revised
For 2024, WEN expects global system-wide sales to grow around 3% compared with the prior estimate of 3-5%. Adjusted EBITDA is still predicted in the band of $535-$545 million.
Adjusted EPS for 2024 is anticipated to be between 99 cents and $1.01 compared with the prior estimate of 98 cents to $1.02. The Zacks Consensus Estimate is pegged at 98 cents.
The company expects cash flow from operations in the band of $365-$385 million. Capital expenditures are anticipated to be between $90 million and $100 million. Free cash flow is expected in the range of $275-$285 million.
WEN’s Zacks Rank
Wendy's currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
Shake Shack Inc. (SHAK - Free Report) posted third-quarter fiscal 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. Both top and bottom lines also increased on a year-over-year basis. The company ramped up its investment in marketing strategies and programs aimed at increasing guest engagement and brand awareness, even amid a challenging market environment. These efforts have paid off, as the company has achieved some of the highest brand awareness levels on record, which, in turn, is fueling robust sales and profitability growth.
SHAK’s fiscal third-quarter adjusted EPS came in at 25 cents, which beat the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, the company reported adjusted EPS of 17 cents. Quarterly revenues of $316.9 million beat the consensus mark of $315 million. The top line increased 14.7% on a year-over-year basis.
BJ's Restaurants, Inc. (BJRI - Free Report) reported third-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Both top and bottom lines increased on a year-over-year basis.
The company reported an adjusted loss per share of 13 cents, missing the Zacks Consensus Estimate of 3 cents. In the year-ago quarter, it recorded an adjusted loss per share of 16 cents. Total revenues of $325.7 million beat the consensus mark by 0.04%. The top line inched up 2.2% year over year. This upside was backed by strong guest traffic and Pizookie Meal Deal performance.
Chipotle Mexican Grill, Inc. (CMG - Free Report) reported mixed third-quarter 2024 results, with earnings beating the Zacks Consensus Estimate for the seventh consecutive quarter but revenues missing the same after beating in the preceding four quarters.
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CMG reported adjusted EPS of 27 cents, outpacing the Zacks Consensus Estimate of 25 cents. The bottom line increased 17.4% from 23 cents reported in the year-ago quarter. Quarterly revenues of $2,793.6 million missed the consensus mark of $2,817 million. However, the top line rose 13% on a year-over-year basis. This upside was driven by strong comparable restaurant sales growth, backed by higher transactions of 3.3% as well as a 2.7% rise in average check.