Why Wendy's Shares Are Surging Today

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  • Wendy's Co WEN reported fourth-quarter FY22 sales growth of 13.4% year-on-year to $536.51 million, beating the consensus of $534.65 million.
  • Adjusted revenues increased 15.5% to $431.3 million. Systemwide sales in the U.S. rose 7.2%, and International increased 16.8%. Global same-restaurant sales growth was 6.4%.
  • The company-operated restaurant margin remained flat at 14.5%. General and administrative expenses rose 6.4% Y/Y to $68.5 million.
  • The operating margin was 15.6%, and operating income for the quarter rose 9.2% Y/Y to $84 million.
  • Adjusted EBITDA increased 20.3% Y/Y to $123.5 million. Adjusted EPS of $0.22 beat the consensus of $0.20.
  • The company held $831.8 million in cash and equivalents as of Jan. 1, 2023. Cash provided by operating activities for twelve months totaled $259.9 million.
  • On Feb. 16, 2023, the company's Board approved a plan to redesign the organizational structure to better support the execution of long-term growth strategy by maximizing organizational efficiency and streamlining decision-making. 
  • In January, the company announced the declaration and 100% increase of its regular quarterly cash dividend to $0.25 per share, payable on Mar. 15, 2023, to shareholders of record as of Mar. 1, 2023.
  • RelatedWendy's Clocks 13.4% Preliminary Top-Line Growth In Q4; Doubles Dividend; Redesigns Organization
  • Outlook: Wendy's sees FY23 adjusted EPS of $0.95 - $1.00 versus the consensus of $1.00.
  • It sees FY23 global systemwide sales growth of 6% to 8%. The company expects FY23 adjusted EBITDA of $530 million - $540 million.
  • For the long-term 2024 – 2025, Wendy's sees systemwide sales growth of mid-single digits and free cash flow growth of high-single to low-double digits.
  • Price Action: WEN shares are trading higher by 1.18% at $22.22 in premarket on the last check Wednesday.
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