雅虎香港財經 Wendy's (WEN) Q1 Earnings Beat Estimates, Revenues Lag
The Wendy's Company WEN reported first-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Solid same-restaurant sales and strength in U.S. breakfast sales and digital sales momentum aided the company’s performance. Following the announcement, Wendy's shares moved up 1.5% during the trading session on May 2.
Q1 Earnings & Revenues
WEN reported adjusted earnings per share (EPS) of 23 cents, beating the Zacks Consensus Estimate of 21 cents. In the prior-year quarter, it reported adjusted EPS of 21 cents.
Revenues of $534.8 million missed the consensus mark of $541 million. The top line inched up 1.1% on a year-over-year basis on the back of net new restaurant development and higher same-restaurant sales. Also, a rise in franchise royalty revenues and advertising funds revenues added to the upside.
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 3.2% year over year compared with 13.9% a year ago. Our estimate was 2.3%.
Comps at global restaurants rose 0.9% year over year compared with 8% in the prior-year quarter. Comps in the United States registered a 0.6% year-over-year improvement compared with 7.2% in the year-ago quarter.
In the quarter under review, Wendy’s inaugurated 35 restaurants globally, reflecting an increase of eight net new units.
System-Wide Sales Discussion
During the reported quarter, global system-wide sales — including company-operated and franchise restaurants — rose 2.6% year over year. System-wide sales in the U.S. and International segments were up 1.7% and 8.8% year over year, respectively.
Operating Highlights
During the quarter under review, the company-operated restaurant margin came in at 15.3% compared with 14.7% in the prior-year quarter. The upside was backed by a higher average check. This was partially offset by customer count declines and higher labor costs.
General and administrative expenses were $63.8 million compared with $62.3 million a year ago. The uptick can be primarily driven by an increase in stock compensation and an increase in employee compensation and benefits. However, this was partially offset by lower outside professional services. We projected the metric to be $65.8 million.
Quarterly operating profit amounted to $81.2 million, down 3.9% from the year-ago levels. The downside was caused by incremental investment in breakfast advertising, higher depreciation, higher amortization of cloud-computing arrangement costs and higher general and administrative expenses. However, this was partially offset by higher franchise royalty revenues and an increase in U.S. company-operated restaurant margin.
Net income was $42 million, up 5.5% from $39.8 million in the year-ago quarter.
Adjusted EBITDA totaled $127.8 million, up 1.8% from $125.6 million in the prior-year quarter. The increase was primarily backed by higher franchise royalty revenues and an increase in U.S. company-operated restaurant margin. This was partially offset by an increase in the company's incremental investment in breakfast advertising and higher general and administrative expenses. Our projection was $128.1 million.
Balance Sheet
Cash and cash equivalents as of Mar 31, 2024, totaled $498.3 million compared with $516 million on Dec 31, 2023. Inventories at the end of the fiscal first quarter amounted to $6.1 million compared with $6.7 million as of Dec 31, 2023. As of Mar 31, 2024, long-term debt was $2.72 billion compared with $2.73 billion at the end of Dec 31, 2023.
Management declared a quarterly dividend of 25 cents per share. The dividend will be paid out on Jun 17, 2024, to shareholders on record as of Jun 3, 2024.
2024 Outlook
For 2024, WEN expects global system-wide sales growth in the range of 5-6%. Adjusted EBITDA is projected in the band of $535-$545 million. Adjusted EPS for 2024 is anticipated to be between $0.98 and $1.02.
The company suggests cash flow from operations in the band of $370-$390 million. Capital expenditures are envisioned to be between $90 million and $100 million. Free cash flow is forecast in the range of $280-$290 million.
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.
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