THE WENDY'S COMPANY REPORTS FOURTH QUARTER AND FULL-YEAR 2024 RESULTS, PROVIDES 2025 OUTLOOK, AND UPDATES ITS CAPITAL ALLOCATION POLICY
Wendy's (WEN) reported Q4 2024 results with systemwide sales growth of 5.4% to $3.7 billion and full-year growth of 3.1% to $14.5 billion. Q4 same-restaurant sales increased 4.3%, while full-year saw 1.5% growth, marking the 14th consecutive year of same-restaurant sales growth.
Q4 net income reached $47.5 million with adjusted EBITDA of $137.5 million (up 8.6%). Full-year net income was $194.4 million with adjusted EBITDA of $543.6 million (up 1.4%). Q4 adjusted earnings per share increased 19% to $0.25, while full-year adjusted EPS grew 3.1% to $1.00.
The company updated its capital allocation policy, targeting a dividend payout ratio of 50-60% of adjusted earnings and plans to repurchase up to $200 million in shares during 2025. For 2025, Wendy's expects global systemwide sales growth of 2-3% and adjusted EPS of $0.98-$1.02.
Wendy's (WEN) ha riportato i risultati del Q4 2024 con una crescita delle vendite a livello di sistema del 5,4% a $3,7 miliardi e una crescita annua del 3,1% a $14,5 miliardi. Le vendite negli stessi ristoranti del Q4 sono aumentate del 4,3%, mentre l'intero anno ha visto una crescita dell'1,5%, segnando il 14° anno consecutivo di crescita delle vendite negli stessi ristoranti.
Il reddito netto del Q4 ha raggiunto i $47,5 milioni con un EBITDA rettificato di $137,5 milioni (in aumento dell'8,6%). Il reddito netto annuale è stato di $194,4 milioni con un EBITDA rettificato di $543,6 milioni (in aumento dell'1,4%). Gli utili per azione rettificati del Q4 sono aumentati del 19% a $0,25, mentre l'utile per azione rettificato annuale è cresciuto del 3,1% a $1,00.
L'azienda ha aggiornato la sua politica di allocazione del capitale, puntando a un rapporto di distribuzione dei dividendi del 50-60% degli utili rettificati e prevede di riacquistare fino a $200 milioni di azioni durante il 2025. Per il 2025, Wendy's si aspetta una crescita delle vendite globali a livello di sistema del 2-3% e un utile per azione rettificato di $0,98-$1,02.
Wendy's (WEN) reportó los resultados del Q4 2024 con un crecimiento de ventas a nivel de sistema del 5.4% a $3.7 mil millones y un crecimiento anual del 3.1% a $14.5 mil millones. Las ventas en los mismos restaurantes del Q4 aumentaron un 4.3%, mientras que el crecimiento anual fue del 1.5%, marcando el 14º año consecutivo de crecimiento en las ventas de los mismos restaurantes.
El ingreso neto del Q4 alcanzó los $47.5 millones con un EBITDA ajustado de $137.5 millones (un aumento del 8.6%). El ingreso neto anual fue de $194.4 millones con un EBITDA ajustado de $543.6 millones (un aumento del 1.4%). Las ganancias por acción ajustadas del Q4 aumentaron un 19% a $0.25, mientras que las ganancias por acción ajustadas anuales crecieron un 3.1% a $1.00.
La compañía actualizó su política de asignación de capital, apuntando a un ratio de pago de dividendos del 50-60% de las ganancias ajustadas y planea recomprar hasta $200 millones en acciones durante 2025. Para 2025, Wendy's espera un crecimiento de ventas a nivel de sistema global del 2-3% y un EPS ajustado de $0.98-$1.02.
웬디스 (WEN)는 2024년 4분기 결과를 발표하며, 시스템 전체 매출이 5.4% 증가한 37억 달러, 연간 매출이 3.1% 증가한 145억 달러를 기록했습니다. 4분기 동일 매장 매출은 4.3% 증가했으며, 연간으로는 1.5% 증가하여 동일 매장 매출이 14년 연속 성장하는 성과를 달성했습니다.
4분기 순이익은 4,750만 달러에 이르렀고, 조정 EBITDA는 1억 3,750만 달러로 8.6% 증가했습니다. 연간 순이익은 1억 9,440만 달러, 조정 EBITDA는 5억 4,360만 달러로 1.4% 증가했습니다. 4분기 조정 주당 순이익은 19% 증가하여 0.25달러에 달했으며, 연간 조정 EPS는 3.1% 성장하여 1.00달러를 기록했습니다.
회사는 자본 배분 정책을 업데이트하여 조정된 이익의 50-60%를 배당금으로 지급할 계획이며, 2025년 동안 최대 2억 달러의 자사주 매입을 계획하고 있습니다. 2025년에는 글로벌 시스템 전체 매출 성장률이 2-3%에 이를 것으로 예상하며, 조정 EPS는 0.98-1.02달러로 예상하고 있습니다.
Wendy's (WEN) a annoncé ses résultats du 4ème trimestre 2024 avec une croissance des ventes à l'échelle du système de 5,4% à 3,7 milliards de dollars et une croissance annuelle de 3,1% à 14,5 milliards de dollars. Les ventes dans les mêmes restaurants ont augmenté de 4,3% au 4ème trimestre, tandis que l'année entière a enregistré une croissance de 1,5%, marquant la 14ème année consécutive de croissance des ventes dans les mêmes restaurants.
Le bénéfice net du 4ème trimestre a atteint 47,5 millions de dollars avec un EBITDA ajusté de 137,5 millions de dollars (en hausse de 8,6%). Le bénéfice net annuel était de 194,4 millions de dollars avec un EBITDA ajusté de 543,6 millions de dollars (en hausse de 1,4%). Le bénéfice par action ajusté du 4ème trimestre a augmenté de 19% à 0,25 dollar, tandis que le BPA ajusté annuel a progressé de 3,1% à 1,00 dollar.
L'entreprise a mis à jour sa politique d'allocation de capital, visant un ratio de distribution de dividendes de 50-60% des bénéfices ajustés, et prévoit de racheter jusqu'à 200 millions de dollars d'actions en 2025. Pour 2025, Wendy's prévoit une croissance des ventes à l'échelle mondiale de 2-3% et un BPA ajusté de 0,98 à 1,02 dollar.
Wendy's (WEN) hat die Ergebnisse für das 4. Quartal 2024 veröffentlicht, mit einem Wachstum des systemweiten Umsatzes von 5,4% auf 3,7 Milliarden Dollar und einem jährlichen Wachstum von 3,1% auf 14,5 Milliarden Dollar. Der Umsatz in vergleichbaren Restaurants im 4. Quartal stieg um 4,3%, während das gesamte Jahr ein Wachstum von 1,5% verzeichnete, was das 14. Jahr in Folge mit Umsatzwachstum in vergleichbaren Restaurants markiert.
Der Nettogewinn im 4. Quartal erreichte 47,5 Millionen Dollar, mit einem bereinigten EBITDA von 137,5 Millionen Dollar (ein Anstieg von 8,6%). Der Nettogewinn für das gesamte Jahr betrug 194,4 Millionen Dollar mit einem bereinigten EBITDA von 543,6 Millionen Dollar (ein Anstieg von 1,4%). Der bereinigte Gewinn pro Aktie im 4. Quartal stieg um 19% auf 0,25 Dollar, während der bereinigte EPS für das gesamte Jahr um 3,1% auf 1,00 Dollar wuchs.
Das Unternehmen hat seine Kapitalallokationspolitik aktualisiert und strebt eine Dividendenquote von 50-60% des bereinigten Gewinns an und plant, im Jahr 2025 bis zu 200 Millionen Dollar an Aktien zurückzukaufen. Für 2025 erwartet Wendy's ein globales Wachstum des systemweiten Umsatzes von 2-3% und einen bereinigten EPS von 0,98-1,02 Dollar.
- Q4 systemwide sales grew 5.4% to $3.7 billion
- Q4 same-restaurant sales increased 4.3%
- Q4 adjusted EBITDA up 8.6% to $137.5 million
- Q4 adjusted EPS increased 19% to $0.25
- 14th consecutive year of same-restaurant sales growth
- Announced $200 million share repurchase plan for 2025
- Full-year net income decreased 4.9% to $194.4 million
- Operating profit declined 2.8% for full-year 2024
- U.S. restaurant count decreased by 97 locations in 2024
- Quarterly dividend to be reduced from $0.25 to $0.14 per share starting Q2 2025
Insights
The Q4 2024 results reveal a company executing well in a challenging environment, with several notable developments that warrant investor attention. The 8.6% increase in Q4 adjusted EBITDA to $137.5 million and 300 basis point improvement in U.S. Company-operated restaurant margin to 16.5% demonstrate strong operational execution and pricing power.
The strategic pivot in capital allocation is particularly significant. Reducing the quarterly dividend by 44% while planning up to
Restaurant count dynamics reveal a strategic evolution: while U.S. locations decreased by 97 units, international locations grew by the same amount, maintaining the global count at 7,240. This rebalancing toward international markets, where Q4 systemwide sales grew
The 2025 guidance of
The consecutive 14-year same-restaurant sales growth streak, while impressive, shows decelerating momentum with full-year 2024 growth of
- Wendy's systemwide sales grew
5.4% in the fourth quarter, reaching$3.7 billion 4.3% . For the full year systemwide sales grew3.1% , reaching$14.5 billion 1.5% . - Total revenues for the fourth quarter were
$574.3 million $459.3 million 6.4% .* Total revenues for the full year were$2.2 billion $1.8 billion 2.0% . - Net income for the fourth quarter was
$47.5 million $137.5 million 8.6% .* Net income for the full year was$194.4 million $543.6 million 1.4% . - Reported diluted earnings per share for the fourth quarter and full year was
$0.23 $0.95 $0.25 19.0% . Adjusted earnings per share for the full year was$1.00 3.1% .* - For the full year 2024, the Company achieved its 14th consecutive year of same-restaurant sales growth.
- The Company updated its capital allocation policy and announced a new target dividend payout ratio of
50% to60% of adjusted earnings and plans to repurchase up to$200 million
"I am proud of our fourth quarter performance, delivering a strong quarter while outpacing the category. This resulted in our 14th consecutive year of global same-restaurant sales growth," said Kirk Tanner, President and Chief Executive Officer.
"We are well positioned to accelerate growth, and we have a clear roadmap for Wendy's future. I am excited about the opportunities ahead of us as we strengthen our system across the globe. Our new capital allocation policy will enable us to pursue these opportunities and maximize long-term shareholder value."
*See "Disclosure Regarding Non-GAAP Financial Measures" and the reconciliation tables that accompany this release for a discussion and reconciliation of certain non-GAAP financial measures included in this release. |
Fourth Quarter and Full Year 2024 Summary
See "Disclosure Regarding Non-GAAP Financial Measures" and the reconciliation tables that accompany this release for a discussion and reconciliation of certain non-GAAP financial measures included in this release.
Operational Highlights | Fourth Quarter | Full Year | |||||
2023 | 2024 | 2023 | 2024 | ||||
Systemwide Sales Growth(1) | |||||||
2.3 % | 4.5 % | 5.1 % | 2.2 % | ||||
International(2) | 9.7 % | 11.3 % | 14.1 % | 9.0 % | |||
Global | 3.2 % | 5.4 % | 6.1 % | 3.1 % | |||
Same-Restaurant Sales Growth(1) | |||||||
0.9 % | 4.1 % | 3.7 % | 1.4 % | ||||
International(2) | 4.3 % | 4.9 % | 8.1 % | 2.8 % | |||
Global | 1.3 % | 4.3 % | 4.3 % | 1.5 % | |||
Systemwide Sales (In US$ Millions)(3) | |||||||
International(2) | |||||||
Global | |||||||
Restaurant Openings | |||||||
31 / 20 | 36 / (78) | 97 / 36 | 101 / (97) | ||||
International - Total / Net | 65 / 54 | 77 / 26 | 151 109 | 175 / 97 | |||
Global - Total / Net | 96 / 74 | 113 / (52) | 248 / 145 | 276 / 0 | |||
Quarter End Restaurant Count | |||||||
6,030 | 5,933 | ||||||
International | 1,210 | 1,307 | |||||
Global | 7,240 | 7,240 | |||||
Global Reimaging Completion Percentage | 86 % | 92 % | |||||
(1) Systemwide sales growth and same-restaurant sales growth are calculated on a constant currency basis and include sales by | |||||||
(2) Excludes | |||||||
(3) Systemwide sales include sales at both Company-operated and franchise restaurants. | |||||||
Financial Highlights | Fourth Quarter | Full Year | |||||||||
2023 | 2024 | B / (W) | 2023 | 2024 | B / (W) | ||||||
($ In Millions Except Per Share Amounts) | (Unaudited) | (Unaudited) | |||||||||
Total Revenues | $ 540.7 | $ 574.3 | 6.2 % | 3.0 % | |||||||
Adjusted Revenues(1) | $ 431.7 | $ 459.3 | 6.4 % | 2.0 % | |||||||
13.5 % | 16.5 % | 3.0 % | 15.3 % | 16.0 % | 0.7 % | ||||||
General and Administrative Expense | $ 65.7 | $ 67.2 | (2.3) % | $ 250.0 | $ 255.2 | (2.1) % | |||||
Operating Profit | $ 86.6 | $ 96.0 | 10.9 % | $ 382.0 | $ 371.4 | (2.8) % | |||||
Reported Effective Tax Rate | 30.2 % | 32.6 % | (2.4) % | 26.8 % | 28.7 % | (1.9) % | |||||
Net Income | $ 46.9 | $ 47.5 | 1.3 % | $ 204.4 | $ 194.4 | (4.9) % | |||||
Adjusted EBITDA | $ 126.6 | $ 137.5 | 8.6 % | $ 535.9 | $ 543.6 | 1.4 % | |||||
Reported Diluted Earnings Per Share | $ 0.23 | $ 0.23 | — % | $ 0.97 | $ 0.95 | (2.1) % | |||||
Adjusted Earnings Per Share | $ 0.21 | $ 0.25 | 19.0 % | $ 0.97 | $ 1.00 | 3.1 % | |||||
Cash Flows from Operations | $ 345.4 | $ 355.3 | 2.9 % | ||||||||
Capital Expenditures | $ (85.0) | $ (94.4) | (11.0) % | ||||||||
Free Cash Flow(2) | $ 274.3 | $ 279.0 | 1.7 % | ||||||||
(1) Total revenues less advertising funds revenue. |
(2) Cash flows from operations minus capital expenditures and the impact of our advertising funds. |
Fourth Quarter Financial Highlights
Total Revenues
The increase in revenues was driven by increases in franchise fees, Company-operated restaurant sales, advertising funds revenue, and franchise royalty revenue.
The increase in
General and Administrative Expense
The increase in general and administrative expense was primarily driven by an increase in incentive compensation and an increase in employee compensation and benefits, partially offset by lower professional fees.
Operating Profit
The increase in operating profit was primarily due to an increase in net franchise fees,
Net Income
The increase in net income was primarily due to the increase in operating profit, partially offset by lapping a gain on the early extinguishment of debt in the prior year and an increase in the effective tax rate.
Adjusted EBITDA
The increase in adjusted EBITDA resulted primarily from an increase in net franchisee fees,
Adjusted Earnings Per Share
The increase in adjusted earnings per share was driven by the same factors as described above for the increase in adjusted EBITDA.
Full Year Financial Highlights
Total Revenues
The increase in revenues resulted primarily from an increase in advertising funds revenue, an increase in franchise fees, and an increase in franchise royalty revenue.
The increase in
General and Administrative Expense
The increase in general and administrative expense was primarily due to an increase in employee compensation and benefits, partially offset by lower professional fees and a decrease in incentive compensation.
Operating Profit
The decrease in operating profit was primarily driven by the Company's incremental investment in breakfast advertising, an increase in impairment from long-lived assets, higher depreciation and amortization, and higher general and administrative expense. These were partially offset by higher franchise royalty revenue,
Net Income
The decrease in net income resulted primarily from the decrease in operating profit.
Adjusted EBITDA
The increase in adjusted EBITDA resulted primarily from an increase in franchise royalty revenue,
Adjusted Earnings Per Share
The increase in adjusted earnings per share was driven by the same factors as described above for the increase in adjusted EBITDA and fewer shares outstanding as a result of the Company's share repurchase program. These were partially offset by higher depreciation and higher cloud computing amortization.
Free Cash Flow
The increase in free cash flow resulted primarily from a decrease in cash paid for cloud computing arrangements, partially offset by an increase in capital expenditures.
Company Declares Quarterly Dividend
The Company announced today the declaration of its regular quarterly cash dividend of
Share Repurchases
The Company repurchased 0.9 million shares for
Company Updates Dividend Policy and Increases Planned Share Repurchases
The Company is updating its capital allocation policy to accelerate growth investments, which it believes will enhance long-term shareholder value. It also enables the Company to take advantage of an opportunity to repurchase shares in 2025 at what the Company believes is an attractive share price.
The Company's new target dividend payout ratio is
The Company expects to return up to
2025 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 2025 the Company Expects:
- Global systemwide sales growth: 2.0 to 3.0 percent
- Adjusted earnings per share:
$0.98 $1.02 - Adjusted EBITDA:
$550 $560 million - Capital expenditures:
$100 $110 million - Free cash flow:
$275 $285 million
Conference Call and Webcast Scheduled for 8:30 a.m. Today, February 13
The Company will host a conference call on Thursday, February 13 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 will be 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 920332. An archived webcast and presentation materials will be available on the Company's Investor Relations website.
Company to Host Investor Day on March 6, 2025
The Company will host an Investor Day in
Forward-Looking Statements
This 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 statements contained in the Reform Act. The Company's actual results, performance and achievements may differ materially from any future results, performance or achievements expressed or implied by the Company's forward-looking statements.
Many important factors could affect the Company's future results and cause those results to differ materially from those expressed in or implied by the Company's forward-looking statements. Such factors include, but are not limited to, the following: (1) the impact of competition or poor customer experiences at Wendy's restaurants; (2) adverse economic conditions or disruptions, including in regions with a high concentration of Wendy's restaurants; (3) changes in discretionary consumer spending and consumer tastes and preferences; (4) impacts to the Company's corporate reputation or the value and perception of the Company's brand; (5) the effectiveness of the Company's marketing and advertising programs and new product development; (6) the Company's ability to manage the impact of social or digital media; (7) the Company's ability to protect its intellectual property; (8) food safety events or health concerns involving the Company's products; (9) our ability to deliver accelerated global sales growth and achieve or maintain market share across our dayparts; (10) the Company's ability to achieve its growth strategy through new restaurant development; (11) the Company's ability to effectively manage the acquisition and disposition of restaurants or successfully implement other strategic initiatives; (12) risks associated with leasing and owning significant amounts of real estate, including environmental matters; (13) risks associated with the Company's international operations, including the ability to execute its international growth strategy; (14) changes in commodity and other operating costs; (15) shortages or interruptions in the supply or distribution of the Company's products and other risks associated with the Company's independent supply chain purchasing co-op; (16) the impact of increased labor costs or labor shortages; (17) the continued succession and retention of key personnel and the effectiveness of the Company's leadership and organizational structure; (18) risks associated with the Company's digital commerce strategy, platforms and technologies, including its ability to adapt to changes in industry trends and consumer preferences; (19) the Company's dependence on computer systems and information technology, including risks associated with the failure or interruption of its systems or technology or the occurrence of cyber incidents or deficiencies; (20) risks associated with the Company's securitized financing facility and other debt agreements, including compliance with operational and financial covenants, restrictions on its ability to raise additional capital, the impact of its overall debt levels and the Company's ability to generate sufficient cash flow to meet its debt service obligations and operate its business; (21) risks associated with the Company's capital allocation policy, including the amount and timing of equity and debt repurchases and dividend payments; (22) risks associated with complaints and litigation, compliance with legal and regulatory requirements and an increased focus on environmental, social and governance issues; (23) risks associated with the availability and cost of insurance, changes in accounting standards, the recognition of impairment or other charges, changes in tax rates or tax laws and fluctuations in foreign currency exchange rates; (24) conditions beyond the Company's control, such as adverse weather conditions, natural disasters, hostilities, social unrest, health epidemics or pandemics or other catastrophic events; and (25) other risks and uncertainties cited in the Company's releases, public statements and/or filings with the Securities and Exchange Commission, including those identified in the "Risk Factors" sections of the Company's Forms 10-K and 10-Q.
In addition to the factors described above, there are risks associated with the Company's predominantly franchised business model that could impact its results, performance and achievements. Such risks include the Company's ability to identify, attract and retain experienced and qualified franchisees, the Company's ability to effectively manage the transfer of restaurants between and among franchisees, the business and financial health of franchisees, the ability of franchisees to meet their royalty, advertising, development, reimaging and other commitments, participation by franchisees in brand strategies and the fact that franchisees are independent third parties that own, operate and are responsible for overseeing the operations of their restaurants. The Company's predominantly franchised business model may also impact the ability of the Wendy's system to effectively respond and adapt to market changes.
All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect the Company.
The Company assumes no obligation to update any forward-looking statements after the date of this release as a result of new information, future events or developments, except as required by federal securities laws, although the Company may do so from time to time. The Company does not endorse any projections regarding future performance that may be made by third parties.
There can be no assurance that any additional regular quarterly cash dividends will be declared or paid after the date hereof, or of the amount or timing of such dividends, if any. Future dividend payments, if any, are subject to applicable law, will be made at the discretion of the Board of Directors and will be based on factors such as the Company's earnings, financial condition and cash requirements and other factors.
Disclosure Regarding Non-GAAP Financial Measures
In addition to the financial measures presented in this release in accordance with
The Company uses adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales as internal measures of business operating performance and as performance measures for benchmarking against the Company's peers and competitors. Adjusted EBITDA and systemwide sales are also used by the Company in establishing performance goals for purposes of executive compensation. The Company believes its presentation of adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales provides a meaningful perspective of the underlying operating performance of our current business and enables investors to better understand and evaluate our historical and prospective operating performance. The Company believes these non-GAAP financial measures are important supplemental measures of operating performance because they eliminate items that vary from period to period without correlation to our core operating performance and highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. Due to the nature and/or size of the items being excluded, such items do not reflect future gains, losses, expenses or benefits and are not indicative of our future operating performance. The Company believes investors, analysts and other interested parties use adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales in evaluating issuers, and the presentation of these measures facilitates a comparative assessment of the Company's operating performance in addition to the Company's performance based on GAAP results.
This release also includes disclosure regarding the Company's free cash flow. Free cash flow is a non-GAAP financial measure that is used by the Company as an internal measure of liquidity. Free cash flow is also used by the Company in establishing performance goals for purposes of executive compensation. The Company defines free cash flow as cash flows from operations minus (i) capital expenditures and (ii) the net change in the restricted operating assets and liabilities of the advertising funds and any excess/deficit of advertising funds revenue over advertising funds expense included in net income, as reported under GAAP. The impact of our advertising funds is excluded because the funds are used solely for advertising and are not available for the Company's working capital needs. The Company may also make additional adjustments for certain non-recurring or unusual items to the extent identified in the reconciliation tables that accompany this release. The Company believes free cash flow is an important liquidity measure for investors and other interested persons because it communicates how much cash flow is available for working capital needs or to be used for repurchasing shares, paying dividends, repaying or refinancing debt, financing possible acquisitions or investments or other uses of cash.
Adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales are not recognized terms under GAAP, and the Company's presentation of these non-GAAP financial measures does not replace the presentation of the Company's financial results in accordance with GAAP. Because all companies do not calculate adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales (and similarly titled financial measures) in the same way, those measures as used by other companies may not be consistent with the way the Company calculates such measures. The non-GAAP financial measures included in this release should not be construed as substitutes for or better indicators of the Company's performance than the most directly comparable GAAP financial measures. See the reconciliation tables that accompany this release for additional information regarding certain of the non-GAAP financial measures included herein.
Key Business Measures
The Company tracks its results of operations and manages its business using certain key business measures, including same-restaurant sales, systemwide sales and Company-operated restaurant margin, which are measures commonly used in the quick-service restaurant industry that are important to understanding Company performance.
Same-restaurant sales and systemwide sales each include sales by both Company-operated and franchise restaurants. The Company reports same-restaurant sales for new restaurants after they have been open for 15 continuous months and for reimaged restaurants as soon as they reopen. Restaurants temporarily closed for more than one fiscal week are excluded from same-restaurant sales.
Franchise restaurant sales are reported by our franchisees and represent their revenues from sales at franchised Wendy's restaurants. Sales by franchise restaurants are not recorded as Company revenues and are not included in the Company's consolidated financial statements. However, the Company's royalty revenues are computed as percentages of sales made by Wendy's franchisees and, as a result, sales by franchisees have a direct effect on the Company's royalty revenues and profitability.
Same-restaurant sales and systemwide sales exclude sales from
The Company calculates same-restaurant sales and systemwide sales growth on a constant currency basis. Constant currency results exclude the impact of foreign currency translation and are derived by translating current year results at prior year average exchange rates. The Company believes excluding the impact of foreign currency translation provides better year over year comparability.
About Wendy's
The Wendy's Company (Nasdaq: WEN) and Wendy's® franchisees employ hundreds of thousands of people across more than 7,000 restaurants worldwide. Founded in 1969, Wendy's is committed to the promise of Fresh Famous Food, Made Right, For You, delivered to customers through its craveable menu including made-to-order square hamburgers using fresh beef*, and fan favorites like the Spicy Chicken Sandwich and nuggets, Baconator®, and the Frosty® dessert. Wendy's supports the Dave Thomas Foundation for Adoption®, established by its founder, which seeks to dramatically increase the number of adoptions of children waiting in
*Fresh beef available in the contiguous
Investor Contact:
Aaron Broholm
Head of Investor Relations
(614) 764-3345; aaron.broholm@wendys.com
Media Contact:
Heidi Schauer
Vice President – Communications, Public Affairs & Customer Care
(614) 764-3368; heidi.schauer@wendys.com
The Wendy's Company and Subsidiaries Consolidated Statements of Operations Three and Twelve Month Periods Ended December 31, 2023 and December 29, 2024 (In Thousands Except Per Share Amounts) (Unaudited)
| |||||||
Three Months Ended | Twelve Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Revenues: | |||||||
Sales | $ 226,725 | $ 232,824 | $ 930,083 | $ 925,905 | |||
Franchise royalty revenue | 127,793 | 133,789 | 512,159 | 528,388 | |||
Franchise fees | 20,468 | 34,175 | 80,172 | 97,614 | |||
Franchise rental income | 56,761 | 58,555 | 230,168 | 236,493 | |||
Advertising funds revenue | 108,904 | 114,930 | 428,996 | 458,092 | |||
540,651 | 574,273 | 2,181,578 | 2,246,492 | ||||
Costs and expenses: | |||||||
Cost of sales | 197,425 | 195,574 | 794,493 | 783,211 | |||
Franchise support and other costs | 15,390 | 20,677 | 57,243 | 67,688 | |||
Franchise rental expense | 30,470 | 31,041 | 125,371 | 127,446 | |||
Advertising funds expense | 108,829 | 120,213 | 428,003 | 478,136 | |||
General and administrative | 65,658 | 67,161 | 249,964 | 255,208 | |||
Depreciation and amortization (exclusive of | 34,531 | 33,228 | 135,789 | 143,234 | |||
Amortization of cloud computing arrangements | 5,086 | 4,064 | 12,778 | 14,701 | |||
System optimization gains, net | (761) | (646) | (880) | (1,219) | |||
Reorganization and realignment costs | 1,100 | 49 | 9,200 | 8,528 | |||
Impairment of long-lived assets | 888 | 6,840 | 1,401 | 9,713 | |||
Other operating (income) loss, net | (4,594) | 51 | (13,768) | (11,513) | |||
454,022 | 478,252 | 1,799,594 | 1,875,133 | ||||
Operating profit | 86,629 | 96,021 | 381,984 | 371,359 | |||
Interest expense, net | (30,263) | (31,081) | (124,061) | (123,881) | |||
Gain on early extinguishment of debt, net | 3,868 | — | 2,283 | — | |||
Investment income (loss), net | 31 | — | (10,358) | 11 | |||
Other income, net | 7,024 | 5,542 | 29,570 | 24,924 | |||
Income before income taxes | 67,289 | 70,482 | 279,418 | 272,413 | |||
Provision for income taxes | (20,351) | (22,985) | (74,978) | (78,056) | |||
Net income | $ 46,938 | $ 47,497 | $ 204,440 | $ 194,357 | |||
Net income per share: | |||||||
Basic | $ .23 | $ .23 | $ .98 | $ .95 | |||
Diluted | .23 | .23 | .97 | .95 | |||
Number of shares used to calculate basic income | 205,938 | 203,848 | 209,486 | 204,351 | |||
Number of shares used to calculate diluted income | 207,578 | 205,045 | 211,534 | 205,614 | |||
The Wendy's Company and Subsidiaries Consolidated Balance Sheets As of December 31, 2023 and December 29, 2024 (In Thousands Except Par Value) (Unaudited)
| |||
December 31, | December 29, | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 516,037 | $ 450,512 | |
Restricted cash | 35,848 | 34,481 | |
Accounts and notes receivable, net | 121,683 | 99,926 | |
Inventories | 6,690 | 6,529 | |
Prepaid expenses and other current assets | 39,640 | 45,563 | |
Advertising funds restricted assets | 117,755 | 99,129 | |
Total current assets | 837,653 | 736,140 | |
Properties | 891,080 | 907,787 | |
Finance lease assets | 228,936 | 244,954 | |
Operating lease assets | 705,615 | 679,777 | |
Goodwill | 773,727 | 771,468 | |
Other intangible assets | 1,219,129 | 1,192,264 | |
Investments | 34,445 | 29,006 | |
Net investment in sales-type and direct financing leases | 313,664 | 288,048 | |
Other assets | 178,577 | 185,399 | |
Total assets | $ 5,182,826 | $ 5,034,843 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Current portion of long-term debt | $ 29,250 | $ 78,163 | |
Current portion of finance lease liabilities | 20,250 | 22,509 | |
Current portion of operating lease liabilities | 49,353 | 50,068 | |
Accounts payable | 27,370 | 28,455 | |
Accrued expenses and other current liabilities | 135,149 | 118,224 | |
Advertising funds restricted liabilities | 120,558 | 100,212 | |
Total current liabilities | 381,930 | 397,631 | |
Long-term debt | 2,732,814 | 2,662,130 | |
Long-term finance lease liabilities | 568,767 | 575,363 | |
Long-term operating lease liabilities | 739,340 | 704,333 | |
Deferred income taxes | 270,353 | 263,420 | |
Deferred franchise fees | 90,132 | 88,387 | |
Other liabilities | 89,711 | 84,227 | |
Total liabilities | 4,873,047 | 4,775,491 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Common stock, issued; 205,397 and 203,834 shares outstanding, respectively | 47,042 | 47,042 | |
Additional paid-in capital | 2,960,035 | 2,982,102 | |
Retained earnings | 409,863 | 399,700 | |
Common stock held in treasury, at cost; 265,027 and 266,590 shares, respectively | (3,048,786) | (3,094,739) | |
Accumulated other comprehensive loss | (58,375) | (74,753) | |
Total stockholders' equity | 309,779 | 259,352 | |
Total liabilities and stockholders' equity | $ 5,182,826 | $ 5,034,843 | |
The Wendy's Company and Subsidiaries Consolidated Statements of Cash Flows Twelve Month Periods Ended December 31, 2023 and December 29, 2024 (In Thousands) (Unaudited)
| |||
Twelve Months Ended | |||
2023 | 2024 | ||
Cash flows from operating activities: | |||
Net income | $ 204,440 | $ 194,357 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization (exclusive of amortization of | 135,789 | 143,234 | |
Amortization of cloud computing arrangements | 12,778 | 14,701 | |
Share-based compensation | 23,747 | 23,019 | |
Impairment of long-lived assets | 1,401 | 9,713 | |
Deferred income tax | (807) | (5,529) | |
Non-cash rental expense, net | 40,655 | 41,904 | |
Change in operating lease liabilities | (47,212) | (48,911) | |
Net receipt (recognition) of deferred vendor incentives | 1,034 | (586) | |
System optimization gains, net | (880) | (1,219) | |
Gain on sale of investments, net | (31) | — | |
Distributions received from TimWen joint venture | 12,901 | 14,408 | |
Equity in earnings in joint ventures, net | (10,819) | (11,607) | |
Long-term debt-related activities, net | 5,320 | 7,479 | |
Cloud computing arrangements expenditures | (32,902) | (18,815) | |
Other, net | 22,883 | 14,542 | |
Changes in operating assets and liabilities: | |||
Accounts and notes receivable | 430 | (5,158) | |
Inventories | 439 | 138 | |
Prepaid expenses and other current assets | (672) | (1,795) | |
Advertising funds restricted assets and liabilities | (18,210) | (20,733) | |
Accounts payable | (8,826) | 1,026 | |
Accrued expenses and other current liabilities | 3,958 | 5,139 | |
Net cash provided by operating activities | 345,416 | 355,307 | |
Cash flows from investing activities: | |||
Capital expenditures | (85,021) | (94,388) | |
Franchise development fund | (7,951) | (41,246) | |
Dispositions | 2,115 | 4,946 | |
Proceeds from sale of investments | 31 | — | |
Notes receivable, net | 4,280 | 1,383 | |
Net cash used in investing activities | (86,546) | (129,305) | |
Cash flows from financing activities: | |||
Repayments of long-term debt | (94,702) | (29,250) | |
Repayments of finance lease liabilities | (21,588) | (20,404) | |
Repurchases of common stock | (189,554) | (77,375) | |
Dividends | (209,253) | (204,443) | |
Proceeds from stock option exercises | 14,667 | 32,859 | |
Payments related to tax withholding for share-based compensation | (3,873) | (4,485) | |
Net cash used in financing activities | (504,303) | (303,098) | |
Net cash used in operations before effect of exchange rate changes on cash | (245,433) | (77,096) | |
Effect of exchange rate changes on cash | 2,448 | (8,112) | |
Net decrease in cash, cash equivalents and restricted cash | (242,985) | (85,208) | |
Cash, cash equivalents and restricted cash at beginning of period | 831,801 | 588,816 | |
Cash, cash equivalents and restricted cash at end of period | $ 588,816 | $ 503,608 | |
The Wendy's Company and Subsidiaries Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues Three and Twelve Month Periods Ended December 31, 2023 and December 29, 2024 (In Thousands) (Unaudited)
| |||||||
Three Months Ended | Twelve Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net income | $ 46,938 | $ 47,497 | $ 204,440 | $ 194,357 | |||
Provision for income taxes | 20,351 | 22,985 | 74,978 | 78,056 | |||
Income before income taxes | 67,289 | 70,482 | 279,418 | 272,413 | |||
Other income, net | (7,024) | (5,542) | (29,570) | (24,924) | |||
Investment (income) loss, net | (31) | — | 10,358 | (11) | |||
Gain on early extinguishment of debt, net | (3,868) | — | (2,283) | — | |||
Interest expense, net | 30,263 | 31,081 | 124,061 | 123,881 | |||
Operating profit | 86,629 | 96,021 | 381,984 | 371,359 | |||
Plus (less): | |||||||
Advertising funds revenue | (108,904) | (114,930) | (428,996) | (458,092) | |||
Advertising funds expense (a) | 108,069 | 112,880 | 424,652 | 455,390 | |||
Depreciation and amortization (exclusive of | 34,531 | 33,228 | 135,789 | 143,234 | |||
Amortization of cloud computing arrangements | 5,086 | 4,064 | 12,778 | 14,701 | |||
System optimization gains, net | (761) | (646) | (880) | (1,219) | |||
Reorganization and realignment costs | 1,100 | 49 | 9,200 | 8,528 | |||
Impairment of long-lived assets | 888 | 6,840 | 1,401 | 9,713 | |||
Adjusted EBITDA | $ 126,638 | $ 137,506 | $ 535,928 | $ 543,614 | |||
Revenues | $ 540,651 | $ 574,273 | $ 2,181,578 | $ 2,246,492 | |||
Less: | |||||||
Advertising funds revenue | (108,904) | (114,930) | (428,996) | (458,092) | |||
Adjusted revenues | $ 431,747 | $ 459,343 | $ 1,752,582 | $ 1,788,400 | |||
(a) | Excludes advertising funds expense of |
The Wendy's Company and Subsidiaries Reconciliation of Net Income and Diluted Earnings Per Share to Adjusted Income and Adjusted Earnings Per Share Three and Twelve Month Periods Ended December 31, 2023 and December 29, 2024 (In Thousands Except Per Share Amounts) (Unaudited)
| |||||||
Three Months Ended | Twelve Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net income | $ 46,938 | $ 47,497 | $ 204,440 | $ 194,357 | |||
Plus (less): | |||||||
Advertising funds revenue | (108,904) | (114,930) | (428,996) | (458,092) | |||
Advertising funds expense (a) | 108,069 | 112,880 | 424,652 | 455,390 | |||
System optimization gains, net | (761) | (646) | (880) | (1,219) | |||
Reorganization and realignment costs | 1,100 | 49 | 9,200 | 8,528 | |||
Impairment of long-lived assets | 888 | 6,840 | 1,401 | 9,713 | |||
Gain on early extinguishment of debt, net | (3,868) | — | (2,283) | — | |||
Total adjustments | (3,476) | 4,193 | 3,094 | 14,320 | |||
Income tax impact on adjustments (b) | 849 | (1,176) | (1,423) | (3,429) | |||
Total adjustments, net of income taxes | (2,627) | 3,017 | 1,671 | 10,891 | |||
Adjusted income | $ 44,311 | $ 50,514 | $ 206,111 | $ 205,248 | |||
Diluted earnings per share | $ .23 | $ .23 | $ .97 | $ .95 | |||
Total adjustments per share, net of income taxes | (.02) | .02 | — | .05 | |||
Adjusted earnings per share | $ .21 | $ .25 | $ .97 | $ 1.00 | |||
(a) | Excludes advertising funds expense of |
(b) | Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. |
The Wendy's Company and Subsidiaries Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Twelve Month Periods Ended December 31, 2023 and December 29, 2024 (In Thousands) (Unaudited)
| |||
Twelve Months Ended | |||
2023 | 2024 | ||
Net cash provided by operating activities | $ 345,416 | $ 355,307 | |
Plus (less): | |||
Capital expenditures | (85,021) | (94,388) | |
Advertising funds impact (a) | 13,866 | 18,031 | |
Free cash flow | $ 274,261 | $ 278,950 | |
(a) | Advertising funds impact for 2023 and 2024 includes the net change in the restricted operating assets and liabilities of the funds of |
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SOURCE The Wendy’s Company
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