4 key takeaways from Wendy’s Q1 earnings report

By:
on May 12, 2021
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  • Wendy's tops Wall Street estimates in the fiscal first quarter.
  • The fast-food chain declared 7.09 pence per share of a dividend.
  • Wendy’s raised its stock buyback programme by £35.45 million.

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Wendy’s Co. (NASDAQ: WEN) published its earnings report for the fiscal first quarter on Wednesday that topped Wall Street estimates. On the back of hawkish quarterly performance, the fast-food chain also raised its guidance for the future.

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1. Financial performance

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Wendy’s reported £29.36 million of net income in the first quarter that translates to 12.76 pence per share. In the same quarter last year, its net income was capped at £10.21 million, or 4.25 pence per share. On an adjusted basis, the American holding company earned 14.18 pence per share in Q1. Wendy’s valued its revenue at £326.32 million in the recent quarter – an increase from £287.28 million last year.

According to FactSet, experts had forecast the company to post £315.54 million of revenue and 10.64 pence of adjusted EPS. In the prior quarter (Q4), Wendy’s had noted £27.71 million of net income.

2. Other notable figures

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Other prominent figures in Wendy’s earnings report include a 13% annualised growth in global same-restaurant sales in the first quarter. International comparable sales were up 7.95 while the United States saw a broader 13.5% increase. In comparison, analysts had called for a 12% and a 14.5% growth in the U.S. and the global same-restaurant sales, respectively.  

3. Guidance for the full financial year

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Wendy’s now forecasts an up to 10% year over year increase in its full-year global systemwide sales growth versus up to 8% expected earlier. It predicts its adjusted per-share earnings to fall in the range of 51.05 to 52.47 pence this year.

FactSet Consensus, on the other hand, is for a 4.8% growth in global systemwide sales and 48.93 pence of adjusted EPS.

4. Dividend and share buybacks

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Wendy’s declared 7.09 pence per share of a dividend on Wednesday – an 11% increase. The Nasdaq-listed firm had 221 million shares outstanding as of 5th May. Wendy’s also raised its stock buyback programme by £35.45 million.

In separate news from the United States, Vizio also reported its quarterly financial results on Tuesday, after the bell.

Impact on the share price

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Wendy’s jumped more than 6% in premarket trading on Wednesday but lost the entire intraday gain on market open. The stock is now exchanging hands at £16.25 per share versus £15.16 at the start of the year. At the time of writing, Wendy’s is valued at £3.61 billion and has a price to earnings ratio of 44.36.

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