Wendy's Mixed Q3: EPS Outlook Narrows Despite Revenue Beats, Sales Growth - Wendy's (NASDAQ:WEN)

The Wendy's Co (NASDAQ:WEN) shares are trading lower after the company reported third-quarter 2024 revenue growth of 2.9% year-over-year to $566.7 million, beating the analyst consensus estimate of $560.75 million.

Adjusted revenues increased 0.5% to $443.6 million. Systemwide sales in the U.S. rose 0.9%, and International increased 7.7%.
Global same-restaurant sales growth was 0.2%. U.S. company-operated restaurant margin was 15.6% (flat year-on-year).
Wendy’s strengthened its “digital and loyalty platforms,” CEO Kirk Tanner said.
Operating profit for the quarter declined 6.8% year over year to $94.7 million. Adjusted EBITDA was $135.2 million versus $139.2 million year over year.
Operating profit decreased due to increased breakfast advertising costs, higher depreciation, and higher general and administrative expenses.
Adjusted EPS of 25 cents in line with the consensus estimate.
As of June, the company held $482.2 million in cash, cash equivalents, and restricted cash of $35.180 million.
Operating cash flow for the nine months totaled $286.7 million, with a free cash flow of $234.1 million.

Buyback: In the third quarter of 2024, the company repurchased 1.5 million shares for $25.2 million and 0.2 million shares for $2.7 million through Oct. 24. Approximately $247.7 million remains available as of October 24 under the company's existing share repurchase authorization that expires in February 2027.

Dividend: The company declared its regular quarterly cash dividend of 25 cents per share, payable on December 16, to shareholders of record as of Dec. 2.

2024 Outlook: Wendy's now expects adjusted EPS of $0.99-$1.01 (vs. $0.99 Estimate) compared to the prior view of $0.98-$1.02.

The company continues to see adjusted EBITDA of $535 million-$545 million.

WEN now sees Global systemwide sales growth of 3% (vs. 3% to 5% earlier) and reiterated guidance for cash flows from operations of $365 million to $385 million, and free cash flow of $275 million to $285 million.

Investors can gain exposure to the stock via VictoryShares US Small Cap High Div Volatility Wtd ETF (NASDAQ:CSB) and ETC 6 Meridian Low Beta Equity ETF (NYSE:SIXL).

Price Action: Wendy’s shares are down 4.43% at $19.41 at the last check Thursday.

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WENThe Wendy's Co

$6.820.44%

Overview

CSBVictoryShares US Small Cap High Div Volatility Wtd ETF

$64.220.62%

SIXLETC 6 Meridian Low Beta Equity ETF

$38.55-0.14%

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