The Wendy’s Company WEN reported stellar fourth-quarter fiscal 2024 results, with adjusted earnings and revenues topping the Zacks Consensus Estimate and increasing year over year.
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The quarterly results reflect solid global same-restaurant sales growth, accompanied by increases in franchise fees, advertising funds revenues and franchise royalty revenues. Moreover, its continued focus on industry-leading quality, innovation and value bodes well.
WEN aims to maintain a customer-first approach while driving its restaurant economic model throughout 2025 and beyond. Amid the environment of diversified growth opportunities in the market, the company is optimistic about its new capital allocation policy that will support it in maximizing long-term shareholder value.
WEN stock gained 3.8% during Thursday’s trading hours.
WEN’s Q4 Earnings & Revenues
The company reported adjusted earnings per share (EPS) of 25 cents, which surpassed the Zacks Consensus Estimate of 24 cents by 4.2%. In the prior-year quarter, it reported adjusted EPS of 21 cents.
Total revenues of $574.3 million also topped the consensus mark of $564 million by 1.8% and grew 6.2% year over year. The quarter’s adjusted revenues (excluding advertising funds revenues) grew 6.4% to $549.3 million.
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 4.9% year over year compared with 4.3% a year ago. Our estimate was pegged at 2.9%.
Comps at global restaurants increased 4.3% year over year compared with 1.3% in the prior-year quarter. Comps in the United States registered 4.1% year-over-year growth compared with 0.9% in the year-ago quarter.
In the quarter under review, Wendy’s inaugurated 113 restaurants globally.
WEN's System-Wide Sales Discussion
In the reported quarter, global system-wide sales, including company-operated and franchise restaurants, rose 5.4% year over year. System-wide sales in the United States and International segments were up 4.5% and 11.3% year over year, respectively.
Operating Highlights of Wendy’s
In the quarter under review, the U.S. company-operated restaurant margin was 16.5%, up 300 basis points (bps) year over year. The uptrend was backed by a higher average check, customer count growth and labor efficiencies.
General and administrative expenses were up 2.3% year over year to $67.2 million from $65.7 million. The upside was caused by an increase in incentive compensation and a rise in employee compensation and benefits, which was partially offset by lower professional fees.
Quarterly operating profit amounted to $96 million, up 10.9% from the year-ago level. The uptrend was driven by increases in net franchise fees, U.S. company-operated restaurant margin and franchise royalty revenues. This was partially offset by WEN’s incremental investment in breakfast advertising and an increase in the impairment of long-lived assets due to closing certain company-operated restaurants.
Net income was $47.5 million, up 1.3% from $46.9 million in the year-ago quarter.
Adjusted EBITDA totaled $137.5 million, up 8.6% from $126.6 million in the prior-year quarter. Our estimate for the metric was $134.1 million.
Sneak Peek at Wendy’s 2024 Results
The company reported total revenues of $2.25 billion, up 3% year over year. Same-restaurant sales at global restaurants increased 1.5% compared with 4.3% in 2023.
The U.S. company-operated restaurant margin was 16%, up 0.7% from 15.3% reported a year ago.
Full-year adjusted EPS increased 1% year over year to $1.00 from 97 cents.
WEN’s Balance Sheet
Wendy’s cash and cash equivalents as of Dec. 29, 2024, totaled $450.5 million compared with $516 million on Dec. 31, 2023. Inventories at the end of the fiscal fourth quarter amounted to $6.5 million compared with $6.7 million as of Dec. 31, 2023. As of Dec. 29, 2024, long-term debt was $2.66 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 March 17, 2025, to its shareholders on record as of March 3.
Wendy’s Unveils 2025 Outlook
WEN expects global system-wide sales to grow between 2% and 3%. Adjusted EBITDA is predicted in the band of $550-$560 million.
Adjusted EPS for the full year is anticipated to be between 98 cents and $1.02.
The company expects free cash flow to be in the band of $275-$285 million. Capital expenditures are anticipated to be between $100 million and $110 million.
WEN’s Zacks Rank & Recent Retail-Wholesale Releases
Wendy’s currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Restaurant Brands International, Inc. QSR reported fourth-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
During the quarter, consolidated comps increased 2.5% year over year and net restaurants grew 3.4% year over year. Global system-wide sales rose 5.6% year over year. QSR unveiled its long-term consolidated performance expectations from 2024 to 2028. It anticipates achieving more than 3% growth in comparable sales and at least 5% net restaurant growth.
McDonald's Corporation MCD reported fourth-quarter 2024 results, wherein earnings were in line with the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines decreased year over year. Its Accelerating-the-Arches strategy remains the right approach for expanding market share.
At company-operated restaurants, sales were $2.31 billion, down 7% year over year. Sales at franchise-operated restaurants amounted to $3.95 billion, which increased 2% year over year. The global comps increased 0.4% compared with 3.4% growth in the prior-year quarter. MCD’s comps increased after witnessing a decline in the preceding two quarters.
YUM! Brands, Inc. YUM reported fourth-quarter 2024 results, with adjusted earnings and total revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
The company’s top-line performance reflected solid contributions from the KFC, Pizza Hut and Taco Bell divisions. It reported progress in the digital space, with digital sales rising approximately 15% and the digital mix surpassing 50%, moving closer to its long-term goal of 100% digital sales. Worldwide system sales — excluding foreign currency translation — grew 8% year over year, with Taco Bell increasing 14% and KFC rising 6%. The metric rose 3% year over year for Pizza Hut.
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