THE WENDY'S COMPANY REPORTS SECOND QUARTER 2024 RESULTS
The Wendy's Company (NASDAQ: WEN) reported its Q2 2024 results, showing modest growth in key metrics. Global systemwide sales increased by 2.6% to $3.729 billion, while same-restaurant sales grew by 0.8%. Total revenues rose 1.6% to $570.7 million. However, operating profit decreased by 9% to $99.5 million, and net income fell 8.4% to $54.6 million.
The company continued its global expansion, opening 64 new restaurants (25 in the U.S. and 39 internationally) during Q2. Wendy's also maintained its quarterly dividend of 25 cents per share and continued its share repurchase program, buying back 1.6 million shares for $27.3 million in Q2.
Despite challenges, Wendy's remains focused on quality, innovation, and value to drive growth and improve restaurant economics throughout 2024 and beyond.
Wendy's Company (NASDAQ: WEN) ha riportato i risultati del secondo trimestre 2024, evidenziando una modesta crescita nei principali indicatori. Le vendite globali a livello di sistema sono aumentate del 2,6% raggiungendo 3,729 miliardi di dollari, mentre le vendite degli stessi ristoranti sono cresciute dello 0,8%. I ricavi totali sono aumentati dell'1,6%, arrivando a 570,7 milioni di dollari. Tuttavia, l'utile operativo è diminuito del 9%, attestandosi a 99,5 milioni di dollari, e l'utile netto è sceso dell'8,4% a 54,6 milioni di dollari.
La società ha continuato la sua espansione globale, aprendo 64 nuovi ristoranti (25 negli Stati Uniti e 39 a livello internazionale) durante il secondo trimestre. Wendy's ha anche mantenuto il suo dividendo trimestrale di 25 centesimi per azione e ha proseguito il suo programma di riacquisto delle azioni, riacquistando 1,6 milioni di azioni per un totale di 27,3 milioni di dollari nel secondo trimestre.
Nonostante le sfide, Wendy's rimane concentrata sulla qualità, innovazione e valore per stimolare la crescita e migliorare l'economia dei ristoranti durante il 2024 e oltre.
La empresa Wendy's (NASDAQ: WEN) ha reportado sus resultados del segundo trimestre de 2024, mostrando un crecimiento modesto en los indicadores clave. Las ventas globales a nivel de sistema aumentaron un 2,6% alcanzando 3,729 millones de dólares, mientras que las ventas en restaurantes comparables crecieron un 0,8%. Los ingresos totales aumentaron un 1,6% hasta 570,7 millones de dólares. Sin embargo, el beneficio operativo disminuyó un 9% a 99,5 millones de dólares, y el ingreso neto cayó un 8,4% a 54,6 millones de dólares.
La compañía continuó su expansión global, abriendo 64 nuevos restaurantes (25 en EE. UU. y 39 internacionalmente) durante el segundo trimestre. Wendy's también mantuvo su dividendo trimestral de 25 centavos por acción y continuó con su programa de recompra de acciones, comprando 1,6 millones de acciones por un total de 27,3 millones de dólares en el segundo trimestre.
A pesar de los desafíos, Wendy's sigue enfocada en la calidad, la innovación y el valor para impulsar el crecimiento y mejorar la economía de los restaurantes durante 2024 y más allá.
웬디스 컴퍼니 (NASDAQ: WEN)는 2024년 2분기 실적을 발표하며 주요 지표에서 작은 성장을 보여주었습니다. 전 세계 시스템 매출은 2.6% 증가하여 37억 2,900만 달러에 달했고, 동일 매장 매출은 0.8% 성장했습니다. 총 수익은 1.6% 증가하여 5억 7,070만 달러에 이르렀습니다. 그러나 운영 이익은 9% 감소하여 9,950만 달러로 줄었고, 순이익은 8.4% 감소하여 5,460만 달러로 떨어졌습니다.
회사는 글로벌 확장을 지속하며 2분기 동안 64개의 신규 레스토랑(미국에 25개, 해외에 39개)을 열었습니다. 웬디스는 주당 25센트의 분기 배당금을 유지하고, 2분기 동안 1.6백만 주를 2,730만 달러에 사들이는 자사주 매입 프로그램을 계속 했습니다.
어려움에도 불구하고 웬디스는 품질, 혁신 및 가치를 중시하며 2024년을 넘어서도 성장을 촉진하고 레스토랑 경제성을 개선하기 위해 집중하고 있습니다.
La société Wendy's (NASDAQ: WEN) a publié ses résultats du deuxième trimestre 2024, montrant une croissance modeste des indicateurs clés. Les ventes mondiales à l'échelle du système ont augmenté de 2,6 % pour atteindre 3,729 milliards de dollars, tandis que les ventes des mêmes restaurants ont crû de 0,8 %. Les revenus totaux ont augmenté de 1,6 % pour s'établir à 570,7 millions de dollars. Cependant, le bénéfice d'exploitation a baissé de 9 % pour atteindre 99,5 millions de dollars, et le bénéfice net a chuté de 8,4 % pour s'établir à 54,6 millions de dollars.
L'entreprise a poursuivi son expansion mondiale, ouvrant 64 nouveaux restaurants (25 aux États-Unis et 39 à l'international) au cours du deuxième trimestre. Wendy's a également maintenu son dividende trimestriel de 25 cents par action et a poursuivi son programme de rachat d'actions, rachetant 1,6 million d'actions pour un montant de 27,3 millions de dollars au deuxième trimestre.
Malgré les défis, Wendy's reste concentrée sur la qualité, l'innovation et la valeur pour stimuler la croissance et améliorer l'économie des restaurants tout au long de 2024 et au-delà.
Die Wendy's Company (NASDAQ: WEN) hat ihre Ergebnisse für das zweite Quartal 2024 veröffentlicht und dabei ein modestes Wachstum in den wichtigsten Kennzahlen gezeigt. Der weltweite Systemumsatz stieg um 2,6% auf 3,729 Milliarden Dollar, während die Umsätze in vergleichbaren Restaurants um 0,8% zunahmen. Die Gesamtumsätze stiegen um 1,6% auf 570,7 Millionen Dollar. Der operative Gewinn hingegen sank um 9% auf 99,5 Millionen Dollar, und der Nettogewinn fiel um 8,4% auf 54,6 Millionen Dollar.
Das Unternehmen setzte seine globale Expansion fort und eröffnete im zweiten Quartal 64 neue Restaurants (25 in den USA und 39 international). Wendy's hielt auch an seiner Vierteljahresdividende von 25 Cent pro Aktie fest und setzte sein Aktienrückkaufprogramm fort, bei dem im zweiten Quartal 1,6 Millionen Aktien für insgesamt 27,3 Millionen Dollar zurückgekauft wurden.
Trotz der Herausforderungen bleibt Wendy's auf Qualität, Innovation und Wertschöpfung fokussiert, um das Wachstum voranzutreiben und die Wirtschaftlichkeit der Restaurants im Jahr 2024 und darüber hinaus zu verbessern.
- Global systemwide sales increased by 2.6% to $3.729 billion
- Same-restaurant sales grew by 0.8% globally
- Total revenues rose 1.6% to $570.7 million
- 64 new restaurants opened globally in Q2, with 39 international openings
- Continued quarterly dividend of 25 cents per share
- Ongoing share repurchase program, with $260 million remaining in authorization
- Operating profit decreased by 9% to $99.5 million
- Net income fell 8.4% to $54.6 million
- U.S. Company-operated restaurant margin decreased from 17.3% to 16.5%
- Adjusted earnings per share decreased by 3.6% to $0.27
- Free cash flow decreased by 6.8% to $124.4 million year-to-date
Insights
Wendy's Q2 2024 results paint a mixed picture for investors. While the company managed to grow systemwide sales by
The company's revenue increased by
On a positive note, Wendy's continues to expand internationally, with net 28 new restaurants opened outside the U.S. in Q2. The company's global reimaging completion percentage has also improved to
The decrease in adjusted earnings per share from
Overall, while Wendy's is showing resilience in a challenging market, the slowing growth and margin pressures warrant careful monitoring by investors.
Wendy's Q2 results reflect the broader challenges facing the Quick Service Restaurant (QSR) industry. The company's global same-restaurant sales growth of
The disparity between U.S. and International performance is striking. While U.S. same-restaurant sales grew by a mere
The company's focus on quality, innovation and value proposition appears to be maintaining its position relative to competitors, as evidenced by the statement that they are "holding steady with the QSR burger category." However, the decline in customer counts in the U.S. is a red flag that needs addressing.
Wendy's continued investment in breakfast advertising, despite its impact on operating profit, indicates a long-term strategy to capture market share in this important daypart. The success of this initiative will be critical to watch in coming quarters.
The increase in global restaurant count from 7,115 to 7,261 year-over-year shows that Wendy's is still finding opportunities for expansion, particularly internationally. This could provide a buffer against slowing growth in mature markets.
In conclusion, while Wendy's is navigating a challenging environment, its international growth and strategic investments may position it for recovery as economic conditions improve.
"Our restaurants across the globe continued to deliver same-restaurant sales growth, holding steady with the QSR burger category in the second quarter," President and Chief Executive Officer Kirk Tanner said. "Our industry leading quality, exciting innovation, and compelling value will remain in focus as we continue to execute our customer first approach and drive the restaurant economic model throughout the rest of the year and beyond."
Second Quarter 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 | Second Quarter | Year-to-Date | |||||
2023 | 2024 | 2023 | 2024 | ||||
Systemwide Sales Growth(1) | |||||||
6.1 % | 1.7 % | 7.3 % | 1.7 % | ||||
International(2) | 12.7 % | 8.3 % | 16.6 % | 8.5 % | |||
Global | 6.9 % | 2.6 % | 8.4 % | 2.6 % | |||
Same-Restaurant Sales Growth(1) | |||||||
4.9 % | 0.6 % | 6.0 % | 0.6 % | ||||
International(2) | 7.2 % | 2.5 % | 10.3 % | 2.8 % | |||
Global | 5.1 % | 0.8 % | 6.5 % | 0.9 % | |||
Systemwide Sales (In US$ Millions)(3) | |||||||
International(2) | |||||||
Global | |||||||
Restaurant Openings | |||||||
19 / 4 | 25 / (15) | 39 / (1) | 43 / (17) | ||||
International - Total / Net | 22 / 16 | 39 / 28 | 41 / 21 | 56 / 38 | |||
Global - Total / Net | 41/ 20 | 64 / 13 | 80 / 20 | 99 / 21 | |||
Quarter End Restaurant Count | |||||||
5,993 | 6,013 | ||||||
International | 1,122 | 1,248 | |||||
Global | 7,115 | 7,261 | |||||
Global Reimaging Completion Percentage | 82 % | 88 % | |||||
(1) Systemwide sales growth and same-restaurant sales growth are calculated on a constant currency basis and include sales | |||||||
(2) Excludes | |||||||
(3) Systemwide sales include sales at both Company-operated and franchise restaurants. | |||||||
Financial Highlights | Second Quarter | Year-to-Date | |||||||||
2023 | 2024 | B / (W) | 2023 | 2024 | B / (W) | ||||||
($ In Millions Except Per Share Amounts) | (Unaudited) | (Unaudited) | |||||||||
Total Revenues | $ 561.6 | $ 570.7 | 1.6 % | 1.4 % | |||||||
Adjusted Revenues(1) | $ 451.8 | $ 455.7 | 0.9 % | $ 879.2 | $ 885.5 | 0.7 % | |||||
17.3 % | 16.5 % | (0.8) % | 16.0 % | 15.9 % | (0.1) % | ||||||
General and Administrative Expense | $ 62.7 | $ 61.5 | 1.9 % | $ 125.0 | $ 125.3 | (0.2) % | |||||
Operating Profit | $ 109.3 | $ 99.5 | (9.0) % | $ 193.8 | $ 180.7 | (6.8) % | |||||
Reported Effective Tax Rate | 24.4 % | 27.0 % | (2.6) % | 25.9 % | 26.9 % | (1.0) % | |||||
Net Income | $ 59.6 | $ 54.6 | (8.4) % | $ 99.5 | $ 96.6 | (2.9) % | |||||
Adjusted EBITDA | $ 144.5 | $ 143.1 | (1.0) % | $ 270.1 | $ 270.9 | 0.3 % | |||||
Reported Diluted Earnings Per Share | $ 0.28 | $ 0.27 | (3.6) % | $ 0.46 | $ 0.47 | 2.2 % | |||||
Adjusted Earnings Per Share | $ 0.28 | $ 0.27 | (3.6) % | $ 0.49 | $ 0.51 | 4.1 % | |||||
Cash Flows from Operations | $ 141.5 | $ 145.5 | 2.8 % | ||||||||
Capital Expenditures | $ (30.2) | $ (34.5) | (14.3) % | ||||||||
Free Cash Flow(2) | $ 133.5 | $ 124.4 | (6.8) % | ||||||||
(1) Total revenues less advertising funds revenue. | |||||||||||
(2) Cash flows from operations minus capital expenditures and the impact of our advertising funds. | |||||||||||
Second Quarter Financial Highlights
Total Revenues
The increase in revenues resulted primarily from an increase in advertising funds revenue and an increase in franchise royalty revenue, both driven by net new restaurant development and higher same-restaurant sales.
The decrease in
General and Administrative Expense
The decrease in general and administrative expense was primarily driven by a decrease in incentive compensation accruals and lower outside professional services driven by lapping costs associated with the implementation of the Company's human capital management system in the prior year. These were partially offset by an increase in employee compensation and benefits.
Operating Profit
The decrease in operating profit resulted primarily from an increase in the Company's incremental investment in breakfast advertising, higher depreciation, higher amortization of cloud-computing arrangement costs, and a decrease in US Company-operated restaurant margin. These were partially offset by higher franchise royalty revenue and lower general and administrative expense.
Net Income
The decrease in net income resulted primarily from a decrease in operating profit and a higher effective tax rate. This was partially offset by lapping a decrease in investment income.
Adjusted EBITDA
The decrease in adjusted EBITDA resulted primarily from the Company's incremental investment in breakfast advertising and a decrease in
Adjusted Earnings Per Share
The decrease in adjusted earnings per share was driven by a decrease in adjusted EBITDA, an increase in depreciation and higher cloud computing amortization costs. These were partially offset by fewer shares outstanding as a result of the Company's share repurchase program and lapping a decrease in investment income in the prior year.
Year to Date Free Cash Flow
The decrease in free cash flow resulted primarily from the Company's incremental investment in breakfast advertising and an increase in capital expenditures. These were partially offset by a decrease in cash paid for cloud computing costs.
Company Declares Quarterly Dividend
The Company announced today the declaration of its regular quarterly cash dividend of
Share Repurchases
The Company repurchased 1.6 million shares for
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 to 5 percent
- Cash flows from operations:
$365 $385 million - Free cash flow:
$275 $285 million
In Addition, the Company Continues to Expect:
- Adjusted EBITDA:
$535 $545 million - Adjusted earnings per share:
$0.98 $1.02 - Capital expenditures:
$90 $100 million
Conference Call and Webcast Scheduled for 8:30 a.m. Today, August 1
The Company will host a conference call on Thursday, August 1 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 also 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 202635. An archived webcast and presentation materials will be available on the Company's Investor Relations website.
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) the disruption to the Company's business from COVID-19 and its impact on the Company's results of operations, financial condition and prospects; (5) impacts to the Company's corporate reputation or the value and perception of the Company's brand; (6) the effectiveness of the Company's marketing and advertising programs and new product development; (7) the Company's ability to manage the impact of social media; (8) the Company's ability to protect its intellectual property; (9) food safety events or health concerns involving the Company's products; (10) our ability to deliver accelerated global sales growth and achieve or maintain market share across our dayparts; (11) the Company's ability to achieve its growth strategy through new restaurant development and its Image Activation program; (12) the Company's ability to effectively manage the acquisition and disposition of restaurants or successfully implement other strategic initiatives; (13) risks associated with leasing and owning significant amounts of real estate, including environmental matters; (14) risks associated with the Company's international operations, including the ability to execute its international growth strategy; (15) changes in commodity and other operating costs; (16) 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; (17) the impact of increased labor costs or labor shortages; (18) the continued succession and retention of key personnel and the effectiveness of the Company's leadership and organizational structure; (19) 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; (20) 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; (21) 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; (22) risks associated with the Company's capital allocation policy, including the amount and timing of equity and debt repurchases and dividend payments; (23) risks associated with complaints and litigation, compliance with legal and regulatory requirements and an increased focus on environmental, social and governance issues; (24) 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; (25) 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 (26) 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
Wendy's® was founded in 1969 by Dave Thomas in
*Fresh beef available in the contiguous
Investor Contact:
Nick Waters
Manager - Investor Relations
(614) 764-3316; nicholas.waters@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 | |||||||
Condensed Consolidated Statements of Operations | |||||||
Three and Six Month Periods Ended July 2, 2023 and June 30, 2024 | |||||||
(In Thousands Except Per Share Amounts) | |||||||
(Unaudited) | |||||||
Three Months Ended | Six Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Revenues: | |||||||
Sales | $ 240,688 | $ 237,355 | $ 468,637 | $ 462,678 | |||
Franchise royalty revenue | 132,128 | 136,318 | 254,278 | 261,998 | |||
Franchise fees | 20,920 | 21,352 | 40,447 | 42,172 | |||
Franchise rental income | 58,033 | 60,638 | 115,840 | 118,624 | |||
Advertising funds revenue | 109,796 | 115,064 | 211,170 | 220,008 | |||
561,565 | 570,727 | 1,090,372 | 1,105,480 | ||||
Costs and expenses: | |||||||
Cost of sales | 201,010 | 199,886 | 397,546 | 391,999 | |||
Franchise support and other costs | 13,787 | 16,222 | 27,047 | 30,964 | |||
Franchise rental expense | 32,396 | 32,390 | 63,025 | 64,168 | |||
Advertising funds expense | 109,618 | 120,817 | 211,279 | 228,191 | |||
General and administrative | 62,742 | 61,496 | 125,018 | 125,253 | |||
Depreciation and amortization (exclusive of | 33,498 | 37,492 | 66,970 | 73,010 | |||
Amortization of cloud computing arrangements | 2,266 | 3,519 | 3,848 | 7,061 | |||
System optimization losses (gains), net | 6 | (280) | 1 | (153) | |||
Reorganization and realignment costs | 681 | 2,452 | 7,489 | 8,125 | |||
Impairment of long-lived assets | 78 | 689 | 454 | 2,695 | |||
Other operating income, net | (3,791) | (3,463) | (6,057) | (6,496) | |||
452,291 | 471,220 | 896,620 | 924,817 | ||||
Operating profit | 109,274 | 99,507 | 193,752 | 180,663 | |||
Interest expense, net | (31,136) | (30,995) | (62,841) | (61,530) | |||
Loss on early extinguishment of debt | — | — | (1,266) | — | |||
Investment (loss) income, net | (6,827) | 11 | (10,389) | 11 | |||
Other income, net | 7,573 | 6,300 | 14,909 | 13,136 | |||
Income before income taxes | 78,884 | 74,823 | 134,165 | 132,280 | |||
Provision for income taxes | (19,252) | (20,180) | (34,712) | (35,644) | |||
Net income | $ 59,632 | $ 54,643 | $ 99,453 | $ 96,636 | |||
Net income per share: | |||||||
Basic | $ .28 | $ .27 | $ .47 | $ .47 | |||
Diluted | .28 | .27 | .46 | .47 | |||
Number of shares used to calculate basic income per share | 210,624 | 204,919 | 211,585 | 205,145 | |||
Number of shares used to calculate diluted income per share | 212,928 | 206,185 | 213,978 | 206,578 | |||
The Wendy's Company and Subsidiaries | |||
Condensed Consolidated Balance Sheets | |||
As of December 31, 2023 and June 30, 2024 | |||
(In Thousands Except Par Value) | |||
(Unaudited) | |||
December 31, | June 30, | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 516,037 | $ 465,489 | |
Restricted cash | 35,848 | 35,718 | |
Accounts and notes receivable, net | 121,683 | 117,671 | |
Inventories | 6,690 | 6,379 | |
Prepaid expenses and other current assets | 39,640 | 40,087 | |
Advertising funds restricted assets | 117,755 | 125,215 | |
Total current assets | 837,653 | 790,559 | |
Properties | 891,080 | 894,586 | |
Finance lease assets | 228,936 | 231,390 | |
Operating lease assets | 705,615 | 687,253 | |
Goodwill | 773,727 | 772,794 | |
Other intangible assets | 1,219,129 | 1,202,525 | |
Investments | 34,445 | 32,181 | |
Net investment in sales-type and direct financing leases | 313,664 | 291,493 | |
Other assets | 178,577 | 185,384 | |
Total assets | $ 5,182,826 | $ 5,088,165 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Current portion of long-term debt | $ 29,250 | $ 29,250 | |
Current portion of finance lease liabilities | 20,250 | 21,220 | |
Current portion of operating lease liabilities | 49,353 | 49,931 | |
Accounts payable | 27,370 | 25,767 | |
Accrued expenses and other current liabilities | 135,149 | 116,456 | |
Advertising funds restricted liabilities | 120,558 | 122,239 | |
Total current liabilities | 381,930 | 364,863 | |
Long-term debt | 2,732,814 | 2,721,927 | |
Long-term finance lease liabilities | 568,767 | 567,071 | |
Long-term operating lease liabilities | 739,340 | 714,298 | |
Deferred income taxes | 270,353 | 270,128 | |
Deferred franchise fees | 90,132 | 89,054 | |
Other liabilities | 89,711 | 87,071 | |
Total liabilities | 4,873,047 | 4,814,412 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Common stock, issued; 205,397 and 204,149 shares outstanding, respectively | 47,042 | 47,042 | |
Additional paid-in capital | 2,960,035 | 2,964,479 | |
Retained earnings | 409,863 | 403,836 | |
Common stock held in treasury, at cost; 265,027 and 266,275 shares, respectively | (3,048,786) | (3,076,632) | |
Accumulated other comprehensive loss | (58,375) | (64,972) | |
Total stockholders' equity | 309,779 | 273,753 | |
Total liabilities and stockholders' equity | $ 5,182,826 | $ 5,088,165 | |
The Wendy's Company and Subsidiaries | |||
Condensed Consolidated Statements of Cash Flows | |||
Six Month Periods Ended July 2, 2023 and June 30, 2024 | |||
(In Thousands) | |||
(Unaudited) | |||
Six Months Ended | |||
2023 | 2024 | ||
Cash flows from operating activities: | |||
Net income | $ 99,453 | $ 96,636 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization (exclusive of amortization of cloud computing arrangements shown separately below) | 66,970 | 73,010 | |
Amortization of cloud computing arrangements | 3,848 | 7,061 | |
Share-based compensation | 10,218 | 11,677 | |
Impairment of long-lived assets | 454 | 2,695 | |
Deferred income tax | 4,254 | (104) | |
Non-cash rental expense, net | 19,552 | 21,120 | |
Change in operating lease liabilities | (23,528) | (24,273) | |
Net receipt of deferred vendor incentives | 6,881 | 5,533 | |
System optimization losses (gains), net | 1 | (153) | |
Distributions received from joint ventures, net of equity in earnings | 542 | 1,146 | |
Long-term debt-related activities, net | 5,334 | 3,738 | |
Cloud computing arrangements expenditures | (16,817) | (6,878) | |
Changes in operating assets and liabilities and other, net | (35,658) | (45,745) | |
Net cash provided by operating activities | 141,504 | 145,463 | |
Cash flows from investing activities: | |||
Capital expenditures | (30,164) | (34,465) | |
Franchise development fund | (395) | (11,477) | |
Dispositions | 280 | 601 | |
Notes receivable, net | 1,335 | 1,383 | |
Net cash used in investing activities | (28,944) | (43,958) | |
Cash flows from financing activities: | |||
Repayments of long-term debt | (46,434) | (14,625) | |
Repayments of finance lease liabilities | (12,336) | (10,336) | |
Repurchases of common stock | (86,930) | (34,248) | |
Dividends | (105,715) | (102,626) | |
Proceeds from stock option exercises | 7,847 | 2,098 | |
Payments related to tax withholding for share-based compensation | (2,708) | (2,645) | |
Net cash used in financing activities | (246,276) | (162,382) | |
Net cash used in operations before effect of exchange rate changes on cash | (133,716) | (60,877) | |
Effect of exchange rate changes on cash | 2,161 | (3,298) | |
Net decrease in cash, cash equivalents and restricted cash | (131,555) | (64,175) | |
Cash, cash equivalents and restricted cash at beginning of period | 831,801 | 588,816 | |
Cash, cash equivalents and restricted cash at end of period | $ 700,246 | $ 524,641 | |
The Wendy's Company and Subsidiaries | |||||||
Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues | |||||||
Three and Six Month Periods Ended July 2, 2023 and June 30, 2024 | |||||||
(In Thousands) | |||||||
(Unaudited) | |||||||
Three Months Ended | Six Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net income | $ 59,632 | $ 54,643 | $ 99,453 | $ 96,636 | |||
Provision for income taxes | 19,252 | 20,180 | 34,712 | 35,644 | |||
Income before income taxes | 78,884 | 74,823 | 134,165 | 132,280 | |||
Other income, net | (7,573) | (6,300) | (14,909) | (13,136) | |||
Investment loss (income), net | 6,827 | (11) | 10,389 | (11) | |||
Loss on early extinguishment of debt | — | — | 1,266 | — | |||
Interest expense, net | 31,136 | 30,995 | 62,841 | 61,530 | |||
Operating profit | 109,274 | 99,507 | 193,752 | 180,663 | |||
Plus (less): | |||||||
Advertising funds revenue | (109,796) | (115,064) | (211,170) | (220,008) | |||
Advertising funds expense (a) | 108,481 | 114,810 | 208,749 | 219,547 | |||
Depreciation and amortization (exclusive of | 33,498 | 37,492 | 66,970 | 73,010 | |||
Amortization of cloud computing arrangements | 2,266 | 3,519 | 3,848 | 7,061 | |||
System optimization losses (gains), net | 6 | (280) | 1 | (153) | |||
Reorganization and realignment costs | 681 | 2,452 | 7,489 | 8,125 | |||
Impairment of long-lived assets | 78 | 689 | 454 | 2,695 | |||
Adjusted EBITDA | $ 144,488 | $ 143,125 | $ 270,093 | $ 270,940 | |||
Revenues | $ 561,565 | $ 570,727 | $ 1,090,372 | $ 1,105,480 | |||
Less: | |||||||
Advertising funds revenue | (109,796) | (115,064) | (211,170) | (220,008) | |||
Adjusted revenues | $ 451,769 | $ 455,663 | $ 879,202 | $ 885,472 | |||
(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 Six Month Periods Ended July 2, 2023 and June 30, 2024 | |||||||
(In Thousands Except Per Share Amounts) | |||||||
(Unaudited) | |||||||
Three Months Ended | Six Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net income | $ 59,632 | $ 54,643 | $ 99,453 | $ 96,636 | |||
Plus (less): | |||||||
Advertising funds revenue | (109,796) | (115,064) | (211,170) | (220,008) | |||
Advertising funds expense (a) | 108,481 | 114,810 | 208,749 | 219,547 | |||
System optimization losses (gains), net | 6 | (280) | 1 | (153) | |||
Reorganization and realignment costs | 681 | 2,452 | 7,489 | 8,125 | |||
Impairment of long-lived assets | 78 | 689 | 454 | 2,695 | |||
Loss on early extinguishment of debt, net | — | — | 1,266 | — | |||
Total adjustments | (550) | 2,607 | 6,789 | 10,206 | |||
Income tax impact on adjustments (b) | (154) | (604) | (2,085) | (2,248) | |||
Total adjustments, net of income taxes | (704) | 2,003 | 4,704 | 7,958 | |||
Adjusted income | $ 58,928 | $ 56,646 | $ 104,157 | $ 104,594 | |||
Diluted earnings per share | $ .28 | $ .27 | $ .46 | $ .47 | |||
Total adjustments per share, net of income taxes | — | — | .03 | .04 | |||
Adjusted earnings per share | $ .28 | $ .27 | $ .49 | $ .51 | |||
(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 | |||
Six Month Periods Ended July 2, 2023 and June 30, 2024 | |||
(In Thousands) | |||
(Unaudited) | |||
Six Months Ended | |||
2023 | 2024 | ||
Net cash provided by operating activities | $ 141,504 | $ 145,463 | |
Plus (less): | |||
Capital expenditures | (30,164) | (34,465) | |
Advertising funds impact (a) | 22,117 | 13,353 | |
Free cash flow | $ 133,457 | $ 124,351 | |
(a) | Represents the net change in the restricted operating assets and liabilities of our advertising funds, which is included in "Changes in operating assets and liabilities and other, net," and the excess of advertising funds expense over advertising funds revenue, which is included in "Net income." |
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SOURCE The Wendy’s Company
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