Wendy's Profit, Revenue Tops Expectations
February 09 2016 - 7:40AM
Dow Jones News
Wendy's Co. reported preliminary fourth-quarter profit that beat
expectations as it continues to see benefits from operating fewer
of its restaurants itself.
The company also said Tuesday it anticipates same-store sales
growth above what analysts were expecting, while its earnings
forecast was in-line with analyst projections. The company expects
adjusted per-share earnings in a range of 35 cents to 37 cents and
same-store sales growth of about 3% in North America.
A survey from Consensus Metrix showed analysts projecting
same-store sales this year rising 2.5% systemwide, while the
consensus view of analysts polled by Thomson Reuters expected
per-share earnings of 36 cents in 2016.
Like many other restaurant chains, including McDonald's Corp.
and Burger King, a unit of Restaurant Brands International Inc.,
Wendy's has sought a more stable cash flow and higher profits by
selling its company-owned restaurants to franchisees. Wendy's cited
its reduced ownership of restaurants as a reason for its higher
results in the quarter, and said it plans to sell about 315 more
restaurants during 2016.
Wendy's said same-restaurant sales at North American restaurants
rose 4.8% in the quarter and 4.9% at its franchise-operated
locations. The Consensus Metrix projection was for 3.1% growth at
franchised restaurants.
Wendy's had moved from having 78% of its restaurants owned by
franchisees to 85%, and plans to have 95% of its restaurants
franchised this year.
Over all, Wendy's posted a preliminary profit of $85.9 million,
or 31 cents a share, compared with a year-earlier profit of $23.3
million, or 6 cents a share. Excluding certain items, earnings from
continuing operations were 12 cents a share, up from 8 cents a year
ago.
Analysts, on average, had expected 11 cents a share, according
to Thomson Reuters.
Revenue slipped 4.7% to $464.4 million, largely due to the
ownership of 363 fewer company-operated restaurants in the period.
Analysts had forecast $456 million in revenue.
Wendy's said it expects to file its audited results by March
3.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
February 09, 2016 07:25 ET (12:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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