Wendy's Serves Up Q1 With Juicy Growth, Strong International Performance

  • Wendy's Co WEN reported first-quarter FY23 sales growth of 8.2% year-on-year to $528.81 million, beating the consensus of $522.43 million.
  • Adjusted revenues increased 7.9% to $427.4 million. Systemwide sales in the U.S. rose 8.6%, and International increased 21%. Global same-restaurant sales growth was 8%. U.S. company-operated restaurant margin was 14.7% versus 12.0% a year ago. 
  • Operating margin was 15.9%, and operating income for the quarter rose 12.8% Y/Y to $84.5 million.
  • Adjusted EBITDA increased 17.5% Y/Y to $125.6 million. Adjusted EPS of $0.21 beat the consensus of $0.20.
  • The company held $740.6 million in cash and equivalents. Cash provided by operating activities for the quarter totaled $53 million, with a free cash flow of $63.7 million.
  • As of May 3, approximately $437.6 million remains available under the company’s existing share repurchase authorization that expires in February 2027.
  • The company declared its regular quarterly cash dividend to $0.25 per share, payable on June 15, 2023, to shareholders of record as of June 1, 2023.
  • Outlook: Wendy's continues to expect FY23 adjusted EPS of $0.95 - $1.00 versus the consensus of $0.98.
  • WEN 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 maintains 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 1.00% at $23.20 in premarket on the last check Wednesday.
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