THE WENDY'S COMPANY REPORTS THIRD QUARTER 2024 RESULTS
DUBLIN, Ohio, Oct. 31, 2024 /PRNewswire/ -- The Wendy's Company (NASDAQ:WEN) today reported unaudited results for the third quarter ended September 29, 2024.
"Wendy's restaurants continued to deliver sales growth during the third quarter, maintaining overall traffic and dollar share in the QSR burger category," said Kirk Tanner, President and Chief Executive Officer. "We continued to strengthen the relationship with our customers through our digital and loyalty platforms while driving growth for the breakfast and late-night dayparts. We expect to build on this progress into the close of this year with exciting new programming to showcase our craveable core, impactful innovation, and relevant value offerings."
Third Quarter 2024 SummarySee "Disclosure Regarding Non-GAAP Financial Measures" and the reconciliation tables that accompany this release for a discussion and reconciliation of certain non-GAAP financial measures included in this release.
Operational Highlights
Third Quarter
Year-to-Date
2023
2024
2023
2024
Systemwide Sales Growth(1)
U.S.
3.6 %
0.9 %
6.0 %
1.4 %
International(2)
13.6 %
7.7 %
15.6 %
8.3 %
Global
4.8 %
1.8 %
7.2 %
2.3 %
Same-Restaurant Sales Growth(1)
U.S.
2.2 %
0.2 %
4.7 %
0.5 %
International(2)
7.8 %
0.7 %
9.4 %
2.1 %
Global
2.8 %
0.2 %
5.2 %
0.7 %
Systemwide Sales (In US$ Millions)(3)
U.S.
$3,113
$3,141
$9,242
$9,375
International(2)
$467
$495
$1,347
$1,439
Global
$3,580
$3,636
$10,589
$10,813
Restaurant Openings
U.S. - Total / Net
27 / 17
22 / (2)
66 / 16
65 / (19)
International - Total / Net
45 / 34
42 / 33
86 / 55
98 / 71
Global - Total / Net
72 / 51
64 / 31
152 / 71
163 / 52
Quarter End Restaurant Count
U.S.
6,010
6,011
International
1,156
1,281
Global
7,166
7,292
Global Reimaging Completion Percentage
83 %
89 %
(1) Systemwide sales growth and same-restaurant sales growth are calculated on a constant currency basis and include sales by both Company-operated and franchise restaurants.
(2) Excludes Argentina.
(3) Systemwide sales include sales at both Company-operated and franchise restaurants.
Financial Highlights
Third Quarter
Year-to-Date
2023
2024
B / (W)
2023
2024
B / (W)
($ In Millions Except Per Share Amounts)
(Unaudited)
(Unaudited)
Total Revenues
$ 550.6
$ 566.7
2.9 %
$ 1,640.9
$ 1,672.2
1.9 %
Adjusted Revenues(1)
$ 441.6
$ 443.6
0.5 %
$ 1,320.8
$ 1,329.1
0.6 %
U.S. Company-Operated Restaurant Margin
15.6 %
15.6 %
— %
15.9 %
15.8 %
(0.1) %
General and Administrative Expense
$ 59.3
$ 62.8
(5.9) %
$ 184.3
$ 188.0
(2.0) %
Operating Profit
$ 101.6
$ 94.7
(6.8) %
$ 295.4
$ 275.3
(6.8) %
Reported Effective Tax Rate
25.5 %
27.9 %
(2.4) %
25.8 %
27.3 %
(1.5) %
Net Income
$ 58.0
$ 50.2
(13.4) %
$ 157.5
$ 146.9
(6.7) %
Adjusted EBITDA
$ 139.2
$ 135.2
(2.9) %
$ 409.3
$ 406.1
(0.8) %
Reported Diluted Earnings Per Share
$ 0.28
$ 0.25
(10.7) %
$ 0.74
$ 0.71
(4.1) %
Adjusted Earnings Per Share
$ 0.27
$ 0.25
(7.4) %
$ 0.76
$ 0.75
(1.3) %
Cash Flows from Operations
$ 269.5
$ 286.7
6.4 %
Capital Expenditures
$ (55.7)
$ (52.4)
6.0 %
Free Cash Flow(2)
$ 226.4
$ 234.1
3.4 %
(1) Total revenues less advertising funds revenue.
(2) Cash flows from operations minus capital expenditures and the impact of our advertising funds.
Third Quarter Financial Highlights
Total Revenues
The increase in revenues resulted primarily from an increase in advertising funds revenue, an increase in franchise royalty revenue, and an increase in franchise fees. These were partially offset by lower Company-operated restaurant sales.
U.S. Company-Operated Restaurant Margin
U.S. Company-operated restaurant margin remained flat to the prior year. The impact of a higher average check and labor efficiencies was offset by labor rate inflation and customer count declines.
General and Administrative Expense
The increase in general and administrative expense was primarily driven by an increase in employee compensation and benefits and an increase in professional fees. These were partially offset by a decrease in incentive compensation accruals.
Operating Profit
The decrease in operating profit resulted primarily from an increase in the Company's incremental investment in breakfast advertising, higher general and administrative expense, and higher depreciation. These were partially offset by higher franchise royalty revenue, higher other operating income, and higher franchise net rental income.
Net Income
The decrease in net income resulted primarily from a decrease in operating profit and a higher effective tax rate.
Adjusted EBITDA
The decrease in adjusted EBITDA resulted primarily from the Company's incremental investment in breakfast advertising and higher general administrative expense, partially offset by an increase in franchise royalty revenue, higher other operating income, and higher franchise net rental income.
Adjusted Earnings Per Share
The decrease in adjusted earnings per share was driven by a decrease in adjusted EBITDA, an increase in depreciation and a higher effective tax rate. These were partially offset by fewer shares outstanding as a result of the Company's share repurchase program.
Year to Date Free Cash Flow
The increase in free cash flow resulted primarily from a decrease in cash paid for cloud computing arrangements and a decrease in capital expenditures. These were partially offset by the Company's incremental investment in breakfast advertising.
Company Declares Quarterly DividendThe Company announced today the declaration of its regular quarterly cash dividend of 25 cents per share. The dividend is payable on December 16, 2024, to shareholders of record as of December 2, 2024. The number of common shares outstanding as of October 24, 2024 was approximately 203.8 million.
Share RepurchasesThe Company repurchased 1.5 million shares for $25.2 million in the third quarter of 2024. In the fourth quarter of 2024, the Company has repurchased 0.2 million shares for $2.7 million through October 24. As of October 24, approximately $247.7 million remains available under the Company's existing share repurchase authorization that expires in February 2027.
2024 Outlook This release includes forward-looking projections for certain non-GAAP financial measures, including systemwide sales, adjusted EBITDA, adjusted earnings per share and free cash flow. The Company excludes certain expenses and benefits from adjusted EBITDA, adjusted earnings per share and free cash flow, such as the impact from our advertising funds, including the net change in the restricted operating assets and liabilities and any excess or deficit of advertising fund revenues over advertising fund expenses, impairment of long-lived assets, reorganization and realignment costs, system optimization gains, net, amortization of cloud computing arrangements, gain on early extinguishment of debt, net, and the timing and resolution of certain tax matters. Due to the uncertainty and variability of the nature and amount of those expenses and benefits, the Company is unable without unreasonable effort to provide projections of net income, earnings per share or net cash provided by operating activities, or a reconciliation of those projected measures.
During 2024 the Company Now Expects:
Global systemwide sales growth: ~3 percent
Adjusted earnings per share: $0.99 to $1.01
In Addition, the Company Continues to Expect:
Adjusted EBITDA: $535 to $545 million
Cash flows from operations: $365 to $385 million
Capital expenditures: $90 to $100 million
Free cash flow: $275 to $285 million
Conference Call and Webcast Scheduled for 8:30 a.m. Today, October 31The Company will host a conference call on Thursday, October 31 at 8:30 a.m. ET, with a simultaneous webcast from the Company's Investor Relations website at www.irwendys.com. The related presentation materials are now available on the Company's Investor Relations website. The live conference call will be available by telephone at (844) 200-6205 for domestic callers and (929) 526-1599 for international callers, both using event ID 838590. An archived webcast and presentation materials will be available on the Company's Investor Relations website.
Company to Host Investor Day on March 5, 2025The Company announced it will host an Investor Day on Wednesday, March 5, 2025. Due to limited capacity, attendance will be by invitation only. Additional details will be provided at a later date. The event will be accessible to all interested parties via live webcast from the Company's Investor Relations website at www.irwendys.com.
Forward-Looking StatementsThis release contains certain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Generally, forward-looking statements include the words "may," "believes," "plans," "expects," "anticipates," "intends," "estimate," "goal," "upcoming," "outlook," "guidance" or the negation thereof, or similar expressions. In addition, all statements that address future operating, financial or business performance, strategies or initiatives, future efficiencies or savings, anticipated costs or charges, future capitalization, anticipated impacts of recent or pending investments or transactions and statements expressing general views about future results or brand health are forward-looking statements within the meaning of the Reform Act. Forward-looking statements are based on the Company's expectations at the time such statements are made, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors. For all such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking ...
