The Wendy’s Company (WEN) is one of the leading quick-service restaurant companies that serves hamburgers, chicken breast sandwiches and wraps, chicken nuggets, chili, baked and French fried potatoes, freshly prepared salads, soft drinks and Frosty desserts.
The company has been focusing on its system optimization initiative since 2013. The system optimization initiative is aimed at changing the business to a franchise-based model. Though the reduction in ownership is currently weighing on near-term revenues, franchising a large chunk of its system is helping to lower overhead expenses.
Investors should also note the recent earnings estimate revisions for WEN, as the consensus estimate has been mostly moving downwards. Meanwhile, WEN’s earnings have been mixed over the past few quarters. Wendy’s has missed earnings in one of the trailing four quarters, has remained in-line in two of the quarters and has beat in the other quarter. Meanwhile, revenues have missed in two of the trailing four quarters while beating the same in rest of the quarters.
Currently, WEN has a Zacks Rank #3 (Hold) but that could change following Wendy’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: WEN beats on earnings. Our consensus earnings estimate called for EPS of 5 cents share, and the company reported EPS of 6 cents. Investors should note that these figures take out stock option expenses.
Revenues: WEN reported revenues of $466.2 million. This missed our consensus estimate of 477 billion.
Key Stats to Note: Comps at company-operated restaurants increased 2.6% in the reported quarter while comps at North American franchise-operated restaurants increased 3.4%.
Wendy’s expects 2015 earnings per share in the range of 33 cents to 35 cents per share, up 10% to 17% year.
The company also announced its intention to sell its bakery operations in Zanesville, Ohio and expects the transaction to close in May 2015.
