Wendy's Makes Announcements Far More Important Than Earnings

With a market cap under three billion, fast food chain Wendy’s WEN posted the results of their second quarter. EPS came in at eight cents, beating the six cent estimate. Conversely, revenue came in at $650.5 million, missing the analyst consensus by 0.8 percent.

The company’s earnings are far from the most important information reported as it was announced roughly 425 company operated restaurants will be sold by the second quarter of 2014.

CEO Emil Brolick commented, “The system optimization initiative will create a growth opportunity for both the Company and strong franchise operators by expanding participation in our Image Activation program to a larger base of franchisees. We expect to generate a higher operating margin and stronger free cash flow, along with further enhancing the quality of our earnings with a more predictable revenue stream from a higher percentage of royalty and rent income.

“We believe system optimization will also enable us to increase our long-term earnings per share growth rate and return incremental cash to shareholders in the form of dividends and share repurchases, beginning with a 25-percent increase in our third-quarter dividend."

Wendy’s also announced a 25 percent increase in their quarterly dividend, bringing the total to $0.05. The next dividend will be paid on September 17th, with a September 3rd record date.

Related: McDonalds is Still On the Value Menu

Looking forward to the rest of the year, 2013 EPS between $0.20 and $0.22 was reiterated. Same store sales is expected to grow by two to three percent while general and administrative, and capital expenditures are expected to rise.

Shares are soaring in the premarket, up ten percent to $7.30.