THE WENDY'S COMPANY REPORTS THIRD QUARTER 2024 RESULTS
Wendy's (WEN) reported Q3 2024 results showing mixed performance. Global systemwide sales grew 1.8% to $3.636 billion, with same-restaurant sales increasing 0.2%. Total revenues rose 2.9% to $566.7 million. However, operating profit declined 6.8% to $94.7 million, and net income decreased 13.4% to $50.2 million. The company maintained its U.S. Company-operated restaurant margin at 15.6%. During Q3, Wendy's opened 64 new restaurants globally and continued its share repurchase program, buying back 1.5 million shares for $25.2 million. The company declared a quarterly dividend of $0.25 per share.
Wendy's (WEN) ha riportato i risultati del terzo trimestre del 2024 mostrando una performance mista. Le vendite globali a livello di sistema sono cresciute dell'1,8% raggiungendo $3,636 miliardi, con un aumento delle vendite negli stessi ristoranti dello 0,2%. I ricavi totali sono aumentati del 2,9% arrivando a $566,7 milioni. Tuttavia, l'utile operativo è diminuito del 6,8% a $94,7 milioni, e il reddito netto è calato del 13,4% a $50,2 milioni. L'azienda ha mantenuto il margine dei ristoranti operati negli Stati Uniti al 15,6%. Durante il terzo trimestre, Wendy's ha aperto 64 nuovi ristoranti a livello globale e ha continuato il suo programma di riacquisto di azioni, riacquistando 1,5 milioni di azioni per $25,2 milioni. L'azienda ha dichiarato un dividendo trimestrale di $0,25 per azione.
Wendy's (WEN) reportó resultados del tercer trimestre de 2024 mostrando un rendimiento mixto. Las ventas globales en todo el sistema crecieron un 1.8% alcanzando $3.636 millones, con un aumento del 0.2% en las ventas de restaurantes comparables. Los ingresos totales aumentaron un 2.9% hasta $566.7 millones. Sin embargo, el beneficio operativo disminuyó un 6.8% a $94.7 millones, y el ingreso neto cayó un 13.4% a $50.2 millones. La empresa mantuvo su margen de restaurantes operados en EE. UU. en 15.6%. Durante el tercer trimestre, Wendy's abrió 64 nuevos restaurantes a nivel global y continuó con su programa de recompra de acciones, recomprando 1.5 millones de acciones por $25.2 millones. La compañía declaró un dividendo trimestral de $0.25 por acción.
Wendy's (WEN)는 2024년 3분기 실적을 발표하며 혼재된 성과를 보였습니다. 전 세계 시스템 매출은 1.8% 증가하여 36억 3,600만 달러에 달했으며, 같은 매장 매출은 0.2% 증가했습니다. 총 수익은 2.9% 증가하여 5억 6,670만 달러에 달했습니다. 그러나 운영 이익은 6.8% 감소하여 9,470만 달러에 달했으며, 순이익은 13.4% 감소하여 5,020만 달러에 달했습니다. 회사는 미국 자회사 운영 레스토랑의 마진을 15.6%로 유지했습니다. 3분기 동안 Wendy's는 전 세계적으로 64개의 새로운 레스토랑을 열었으며, 150만 주를 2,520만 달러에 매입하며 자사주 매입 프로그램을 계속 진행했습니다. 회사는 주당 0.25 달러의 분기 배당금을 선언했습니다.
Wendy's (WEN) a publié les résultats du troisième trimestre 2024 montrant une performance mitigée. Les ventes mondiales dans l'ensemble du système ont augmenté de 1,8 % pour atteindre 3,636 milliards de dollars, avec une augmentation de 0,2 % des ventes dans les mêmes restaurants. Les revenus totaux ont augmenté de 2,9 % pour atteindre 566,7 millions de dollars. Cependant, le bénéfice d'exploitation a diminué de 6,8 % à 94,7 millions de dollars, et le revenu net a chuté de 13,4 % à 50,2 millions de dollars. L'entreprise a maintenu sa marge des restaurants opérationnels aux États-Unis à 15,6 %. Au cours du troisième trimestre, Wendy's a ouvert 64 nouveaux restaurants dans le monde et a poursuivi son programme de rachat d'actions, rachetant 1,5 million d'actions pour 25,2 millions de dollars. La société a déclaré un dividende trimestriel de 0,25 $ par action.
Wendy's (WEN) hat die Ergebnisse des dritten Quartals 2024 veröffentlicht, die eine gemischte Leistung zeigen. Die globalen Systemumsätze stiegen um 1,8% auf 3,636 Milliarden Dollar, während die Same-Restaurant-Umsätze um 0,2% zunahmen. Die Gesamterlöse stiegen um 2,9% auf 566,7 Millionen Dollar. Allerdings sank der Betriebsgewinn um 6,8% auf 94,7 Millionen Dollar, und der Nettogewinn verringerte sich um 13,4% auf 50,2 Millionen Dollar. Das Unternehmen hielt seine Rentabilität der in den USA betriebenen Restaurants bei 15,6%. Im dritten Quartal eröffnete Wendy's weltweit 64 neue Restaurants und setzte sein Aktienrückkaufprogramm fort, indem es 1,5 Millionen Aktien für 25,2 Millionen Dollar zurückkaufte. Das Unternehmen gab eine vierteljährliche Dividende von 0,25 Dollar pro Aktie bekannt.
- Global systemwide sales increased 1.8% to $3.636 billion
- Total revenues grew 2.9% to $566.7 million
- Maintained U.S. Company-operated restaurant margin at 15.6%
- Free cash flow improved 3.4% to $234.1 million year-to-date
- Operating profit decreased 6.8% to $94.7 million
- Net income declined 13.4% to $50.2 million
- Adjusted EBITDA fell 2.9% to $135.2 million
- U.S. same-restaurant sales growth slowed to 0.2% from 2.2% in prior year
- General and administrative expenses increased 5.9% to $62.8 million
Insights
Wendy's Q3 2024 results reveal concerning trends with significant deceleration in growth. Global same-restaurant sales grew just
Key metrics show operational challenges:
- U.S. same-store sales nearly flat at
0.2% - International growth slowed dramatically to
0.7% from7.8% - Net restaurant count growth weakening with U.S. showing net closures
The QSR sector faces significant headwinds as reflected in Wendy's performance. While maintaining market share in the burger category, the company's growth strategy through digital platforms and daypart expansion hasn't delivered substantial results. The
Concerning indicators include:
- Declining customer counts in company-operated restaurants
- Slowing international expansion momentum
- Heavy reliance on price increases rather than traffic growth
"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 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 | Third Quarter | Year-to-Date | |||||
2023 | 2024 | 2023 | 2024 | ||||
Systemwide Sales Growth(1) | |||||||
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) | |||||||
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) | |||||||
International(2) | |||||||
Global | |||||||
Restaurant Openings | |||||||
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 | |||||||
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 | |||||||
(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 % | 1.9 % | |||||||
Adjusted Revenues(1) | $ 441.6 | $ 443.6 | 0.5 % | 0.6 % | |||||||
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.
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 Dividend
The Company announced today the declaration of its regular quarterly cash dividend of
Share Repurchases
The Company repurchased 1.5 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 percent
- Adjusted earnings per share:
$0.99 $1.01
In Addition, the Company Continues to Expect:
- Adjusted EBITDA:
$535 $545 million - Cash flows from operations:
$365 $385 million - Capital expenditures:
$90 $100 million - Free cash flow:
$275 $285 million
Conference Call and Webcast Scheduled for 8:30 a.m. Today, October 31
The 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, 2025
The 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 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:
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 Condensed Consolidated Statements of Operations Three and Nine Month Periods Ended October 1, 2023 and September 29, 2024 (In Thousands Except Per Share Amounts) (Unaudited)
| |||||||
Three Months Ended | Nine Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Revenues: | |||||||
Sales | $ 234,721 | $ 230,403 | $ 703,358 | $ 693,081 | |||
Franchise royalty revenue | 130,088 | 132,601 | 384,366 | 394,599 | |||
Franchise fees | 19,257 | 21,267 | 59,704 | 63,439 | |||
Franchise rental income | 57,567 | 59,314 | 173,407 | 177,938 | |||
Advertising funds revenue | 108,922 | 123,154 | 320,092 | 343,162 | |||
550,555 | 566,739 | 1,640,927 | 1,672,219 | ||||
Costs and expenses: | |||||||
Cost of sales | 199,522 | 195,638 | 597,068 | 587,637 | |||
Franchise support and other costs | 14,806 | 16,047 | 41,853 | 47,011 | |||
Franchise rental expense | 31,876 | 32,237 | 94,901 | 96,405 | |||
Advertising funds expense | 107,895 | 129,732 | 319,174 | 357,923 | |||
General and administrative | 59,288 | 62,794 | 184,306 | 188,047 | |||
Depreciation and amortization (exclusive of amortization of cloud computing | 34,288 | 36,996 | 101,258 | 110,006 | |||
Amortization of cloud computing arrangements | 3,844 | 3,576 | 7,692 | 10,637 | |||
System optimization gains, net | (120) | (420) | (119) | (573) | |||
Reorganization and realignment costs | 611 | 354 | 8,100 | 8,479 | |||
Impairment of long-lived assets | 59 | 178 | 513 | 2,873 | |||
Other operating income, net | (3,117) | (5,068) | (9,174) | (11,564) | |||
448,952 | 472,064 | 1,345,572 | 1,396,881 | ||||
Operating profit | 101,603 | 94,675 | 295,355 | 275,338 | |||
Interest expense, net | (30,957) | (31,270) | (93,798) | (92,800) | |||
Loss on early extinguishment of debt | (319) | — | (1,585) | — | |||
Investment (loss) income, net | — | — | (10,389) | 11 | |||
Other income, net | 7,637 | 6,246 | 22,546 | 19,382 | |||
Income before income taxes | 77,964 | 69,651 | 212,129 | 201,931 | |||
Provision for income taxes | (19,915) | (19,427) | (54,627) | (55,071) | |||
Net income | $ 58,049 | $ 50,224 | $ 157,502 | $ 146,860 | |||
Net income per share: | |||||||
Basic | $ .28 | $ .25 | $ .75 | $ .72 | |||
Diluted | .28 | .25 | .74 | .71 | |||
Number of shares used to calculate basic income per share | 208,834 | 203,264 | 210,668 | 204,518 | |||
Number of shares used to calculate diluted income per share | 210,602 | 204,254 | 212,853 | 205,803 | |||
The Wendy's Company and Subsidiaries Condensed Consolidated Balance Sheets As of December 31, 2023 and September 29, 2024 (In Thousands Except Par Value) (Unaudited)
| |||
December 31, | September 29, | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 516,037 | $ 482,224 | |
Restricted cash | 35,848 | 35,180 | |
Accounts and notes receivable, net | 121,683 | 111,413 | |
Inventories | 6,690 | 6,251 | |
Prepaid expenses and other current assets | 39,640 | 32,816 | |
Advertising funds restricted assets | 117,755 | 115,329 | |
Total current assets | 837,653 | 783,213 | |
Properties | 891,080 | 894,200 | |
Finance lease assets | 228,936 | 235,780 | |
Operating lease assets | 705,615 | 686,286 | |
Goodwill | 773,727 | 773,187 | |
Other intangible assets | 1,219,129 | 1,199,413 | |
Investments | 34,445 | 31,758 | |
Net investment in sales-type and direct financing leases | 313,664 | 285,711 | |
Other assets | 178,577 | 183,675 | |
Total assets | $ 5,182,826 | $ 5,073,223 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Current portion of long-term debt | $ 29,250 | $ 29,250 | |
Current portion of finance lease liabilities | 20,250 | 21,952 | |
Current portion of operating lease liabilities | 49,353 | 50,578 | |
Accounts payable | 27,370 | 29,047 | |
Accrued expenses and other current liabilities | 135,149 | 128,734 | |
Advertising funds restricted liabilities | 120,558 | 113,511 | |
Total current liabilities | 381,930 | 373,072 | |
Long-term debt | 2,732,814 | 2,716,486 | |
Long-term finance lease liabilities | 568,767 | 567,242 | |
Long-term operating lease liabilities | 739,340 | 712,570 | |
Deferred income taxes | 270,353 | 270,089 | |
Deferred franchise fees | 90,132 | 89,300 | |
Other liabilities | 89,711 | 84,611 | |
Total liabilities | 4,873,047 | 4,813,370 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Common stock, issued; 205,397 and 203,089 shares outstanding, respectively | 47,042 | 47,042 | |
Additional paid-in capital | 2,960,035 | 2,967,927 | |
Retained earnings | 409,863 | 403,259 | |
Common stock held in treasury, at cost; 265,027 and 267,335 shares, respectively | (3,048,786) | (3,097,785) | |
Accumulated other comprehensive loss | (58,375) | (60,590) | |
Total stockholders' equity | 309,779 | 259,853 | |
Total liabilities and stockholders' equity | $ 5,182,826 | $ 5,073,223 | |
The Wendy's Company and Subsidiaries Condensed Consolidated Statements of Cash Flows Nine Month Periods Ended October 1, 2023 and September 29, 2024 (In Thousands) (Unaudited)
| |||
Nine Months Ended | |||
2023 | 2024 | ||
Cash flows from operating activities: | |||
Net income | $ 157,502 | $ 146,860 | |
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) | 101,258 | 110,006 | |
Amortization of cloud computing arrangements | 7,692 | 10,637 | |
Share-based compensation | 16,769 | 18,491 | |
Impairment of long-lived assets | 513 | 2,873 | |
Deferred income tax | (502) | (465) | |
Non-cash rental expense, net | 30,724 | 31,973 | |
Change in operating lease liabilities | (35,319) | (36,461) | |
Net receipt of deferred vendor incentives | 4,007 | 1,449 | |
System optimization (gains), net | (119) | (573) | |
Distributions received from joint ventures, net of equity in earnings | 1,349 | 2,055 | |
Long-term debt-related activities, net | 7,310 | 5,609 | |
Cloud computing arrangements expenditures | (25,154) | (10,583) | |
Changes in operating assets and liabilities and other, net | 3,495 | 4,810 | |
Net cash provided by operating activities | 269,525 | 286,681 | |
Cash flows from investing activities: | |||
Capital expenditures | (55,689) | (52,361) | |
Franchise development fund | (1,947) | (21,040) | |
Dispositions | 280 | 3,222 | |
Notes receivable, net | 1,825 | 1,383 | |
Net cash used in investing activities | (55,531) | (68,796) | |
Cash flows from financing activities: | |||
Repayments of long-term debt | (61,280) | (21,937) | |
Repayments of finance lease liabilities | (16,947) | (15,421) | |
Repurchases of common stock | (142,413) | (60,056) | |
Dividends | (157,871) | (153,411) | |
Proceeds from stock option exercises | 9,113 | 4,651 | |
Payments related to tax withholding for share-based compensation | (3,827) | (4,395) | |
Net cash used in financing activities | (373,225) | (250,569) | |
Net cash used in operations before effect of exchange rate changes on cash | (159,231) | (32,684) | |
Effect of exchange rate changes on cash | 307 | (1,603) | |
Net decrease in cash, cash equivalents and restricted cash | (158,924) | (34,287) | |
Cash, cash equivalents and restricted cash at beginning of period | 831,801 | 588,816 | |
Cash, cash equivalents and restricted cash at end of period | $ 672,877 | $ 554,529 | |
The Wendy's Company and Subsidiaries Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues Three and Nine Month Periods Ended October 1, 2023 and September 29, 2024 (In Thousands) (Unaudited)
| |||||||
Three Months Ended | Nine Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net income | $ 58,049 | $ 50,224 | $ 157,502 | $ 146,860 | |||
Provision for income taxes | 19,915 | 19,427 | 54,627 | 55,071 | |||
Income before income taxes | 77,964 | 69,651 | 212,129 | 201,931 | |||
Other income, net | (7,637) | (6,246) | (22,546) | (19,382) | |||
Investment loss (income), net | — | — | 10,389 | (11) | |||
Loss on early extinguishment of debt | 319 | — | 1,585 | — | |||
Interest expense, net | 30,957 | 31,270 | 93,798 | 92,800 | |||
Operating profit | 101,603 | 94,675 | 295,355 | 275,338 | |||
Plus (less): | |||||||
Advertising funds revenue | (108,922) | (123,154) | (320,092) | (343,162) | |||
Advertising funds expense (a) | 107,834 | 122,963 | 316,583 | 342,510 | |||
Depreciation and amortization (exclusive of amortization of cloud computing | 34,288 | 36,996 | 101,258 | 110,006 | |||
Amortization of cloud computing arrangements | 3,844 | 3,576 | 7,692 | 10,637 | |||
System optimization gains, net | (120) | (420) | (119) | (573) | |||
Reorganization and realignment costs | 611 | 354 | 8,100 | 8,479 | |||
Impairment of long-lived assets | 59 | 178 | 513 | 2,873 | |||
Adjusted EBITDA | $ 139,197 | $ 135,168 | $ 409,290 | $ 406,108 | |||
Revenues | $ 550,555 | $ 566,739 | $ 1,640,927 | $ 1,672,219 | |||
Less: | |||||||
Advertising funds revenue | (108,922) | (123,154) | (320,092) | (343,162) | |||
Adjusted revenues | $ 441,633 | $ 443,585 | $ 1,320,835 | $ 1,329,057 | |||
(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 Nine Month Periods Ended October 1, 2023 and September 29, 2024 (In Thousands Except Per Share Amounts) (Unaudited)
| |||||||
Three Months Ended | Nine Months Ended | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net income | $ 58,049 | $ 50,224 | $ 157,502 | $ 146,860 | |||
Plus (less): | |||||||
Advertising funds revenue | (108,922) | (123,154) | (320,092) | (343,162) | |||
Advertising funds expense (a) | 107,834 | 122,963 | 316,583 | 342,510 | |||
System optimization gains, net | (120) | (420) | (119) | (573) | |||
Reorganization and realignment costs | 611 | 354 | 8,100 | 8,479 | |||
Impairment of long-lived assets | 59 | 178 | 513 | 2,873 | |||
Loss on early extinguishment of debt | 319 | — | 1,585 | — | |||
Total adjustments | (219) | (79) | 6,570 | 10,127 | |||
Income tax impact on adjustments (b) | (187) | (5) | (2,272) | (2,253) | |||
Total adjustments, net of income taxes | (406) | (84) | 4,298 | 7,874 | |||
Adjusted income | $ 57,643 | $ 50,140 | $ 161,800 | $ 154,734 | |||
Diluted earnings per share | $ .28 | $ .25 | $ .74 | $ .71 | |||
Total adjustments per share, net of income taxes | (.01) | — | .02 | .04 | |||
Adjusted earnings per share | $ .27 | $ .25 | $ .76 | $ .75 | |||
(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 Nine Month Periods Ended October 1, 2023 and September 29, 2024 (In Thousands) (Unaudited)
| |||
Nine Months Ended | |||
2023 | 2024 | ||
Net cash provided by operating activities | $ 269,525 | $ 286,681 | |
Plus (less): | |||
Capital expenditures | (55,689) | (52,361) | |
Advertising funds impact (a) | 12,613 | (244) | |
Free cash flow | $ 226,449 | $ 234,076 | |
(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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