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The Wendy’s Company WEN reported first-quarter fiscal 2025 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. On a year-over-year basis, both top and bottom lines declined.
The quarterly results reflect a decline in global systemwide sales, mainly due to lower same-restaurant sales in the U.S. segment. The top line decreased due to lower company-operated restaurant sales, advertising fund revenues and a drop in franchise royalty revenues.
However, the WEN stock gained 3% in today’s pre-market trading session.
Despite a tough consumer environment in the United States, the company maintained traffic and dollar share. Wendy’s added 68 net restaurants globally and introduced a new field structure to support franchise operations.
Going forward, the company will continue to work on improving food quality, customer service and global restaurant growth. Wendy’s aims to stay aligned with these priorities to support long-term business performance.
WEN reported adjusted earnings per share (EPS) of 20 cents, which was in line with the Zacks Consensus Estimate. In the prior-year quarter, it reported adjusted EPS of 23 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Total revenues of $523.5 million missed the consensus mark of $524 million by 0.1% and declined 2.1% year over year. The quarter’s adjusted revenues (excluding advertising funds revenues) fell 1.6% to $423.1 million.
The Wendy's Company price-consensus-eps-surprise-chart | The Wendy's Company Quote
Same-restaurant sales at international restaurants (excluding Argentina) rose 2.3% year over year (in-line with our expectation) compared with 3.2% a year ago.
Comps at global restaurants decreased 2.1% against an increase of 0.9% in the prior-year quarter. Comps in the United States registered a 2.8% year-over-year decline against an increase of 0.6% in the year-ago quarter.
In the quarter under review, Wendy’s inaugurated 74 restaurants globally.
In the reported quarter, global system-wide sales, including company-operated and franchise restaurants, declined 1.1% year over year. System-wide sales in the United States declined 2.6% year over year, while the International segment increased 8.9%.
In the quarter under review, the U.S. company-operated restaurant margin was 14.8%, down 50 basis points year over year. The downtrend was due to commodity inflation, a decline in traffic and labor rate inflation. However, this was partially offset by an increase in average check and labor efficiencies.
General and administrative expenses were up 6.9% year over year to $68.2 million from $63.8 million. This upside was caused by an increase in employee compensation and benefits, including investments in resources to support technology and operations initiatives.
Quarterly operating profit amounted to $83.1 million, up 2.3% from the year-ago level.
Net income was $39.2 million, down 6.7% from $42 million in the year-ago quarter.
Adjusted EBITDA totaled $124.5 million, down 2.6% from $127.8 million in the prior-year quarter. Our estimate for the metric was $125.1 million.
Wendy’s cash and cash equivalents as of March 31, 2025, totaled $335.3 million compared with $450.5 million on Dec. 29, 2024. Inventories at the end of the fiscal first quarter amounted to $6.2 million compared with $6.5 million as of Dec. 29, 2024. As of March 31, 2025, long-term debt of $2.66 billion was in line with the figure as of Dec. 29, 2024.
Management declared a quarterly dividend of 14 cents per share. The dividend will be paid out on June 16, 2025, to its shareholders on record as of June 2, 2025.
WEN now expects global system-wide sales to grow between (2%) to flat compared with the prior estimate of 2-3%. Adjusted EBITDA is now predicted in the band of $530-$545 million compared with the prior estimate of $550-$560 million.
Adjusted EPS for the full year is anticipated to be between 92 cents and 98 cents compared with the prior estimate of 98 cents to $1.02. The company reported adjusted EPS of $1 in 2024.
WEN now expects free cash flow to be in the band of $250-$270 million compared with the prior estimate of $275-$285 million. Capital expenditures are still anticipated to be between $100 million and $110 million.
Wendy’s currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Fastenal Company’s FAST first-quarter 2025 adjusted earnings were in line with the Zacks Consensus Estimate and on par year over year. On the other hand, net sales surpassed the consensus mark and grew year over year.
The top-line growth was attributable to improved customer contract signings over the past 12 months, which were partially offset by sluggish underlying business activity. The bottom line was adversely impacted by higher fleet and transportation costs, along with increased labor costs.
Chipotle Mexican Grill, Inc. CMG reported mixed first-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
Chipotle's first-quarter results were affected by various headwinds, including unfavorable weather conditions and reduced consumer spending. Along with expanding its brand presence both domestically and internationally, Chipotle has made notable strides in enhancing restaurant operations, advancing back-of-house innovations.
Dave & Buster's Entertainment, Inc. PLAY posted fourth-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Both metrics declined on a year-over-year basis.
Dave & Buster’s reported a weak fourth quarter but expressed confidence in its direction as recent trends show signs of improvement. The current leadership team is undoing several decisions made by prior management in marketing, operations and capital spending, and is returning to a more disciplined, fundamentals-driven strategy.
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This article originally published on Zacks Investment Research (zacks.com).
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