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Wendy's (WEN) Reports Solid Q4 Preliminary Results, Stock Up

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The Wendy's Company (WEN - Free Report) reported preliminary results for fourth-quarter and fiscal-year 2022. The company also increased its quarterly dividend by 100% and approved a new share repurchase program. Following the results, the company’s shares increased nearly 6% on Jan 13. In the past three months, the company’s shares have gained 15.6%, compared with the industry’s increase of 12.7%.

Q4 & 2022 Preliminary Results

Per the company’s fiscal fourth-quarter preliminary results, global systemwide sales and same-restaurant sales improved 8.4% and 6.4% year over year, respectively. In 2022, global systemwide sales and same-restaurant sales improved 6.8% and 4.9%, year over year, respectively. In fourth-quarter and fiscal 2022, the company opened 78 and 276 stores globally, respectively.

In fiscal fourth-quarter 2022, total revenues increased 13.4% to $536.5 million. The company’s operating margin remained flat year over year to 14.5% while operating profit increased 9.2% to $84 million.

Adjusted EBITDA improved 20.3% year over year to $123.5 million. General and administrative expense decreased 6.4% year over year to $68.5 million.

Nelson Peltz, chief executive officer and a founding partner of Trian Fund Management, L.P. (Wendy's largest shareholder), and Wendy's non-executive chairman said, “Trian believes strongly in the future of Wendy's, is confident in the Company's growth plans and is strongly supportive of the capital allocation strategy announced today.”

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Dividend & Share Repurchase

The company increased its quarterly dividend by 100% to 25 cents per share. The dividend will be paid on Mar 15 to stockholders of record as of Mar 1.

The company's board of directors announced a fresh $500 million share repurchase program, which will expire in February 2027. The company has cancelled its previously announced $250 million share repurchase program, which was set to expire in February 2023.

The company currently has a Zacks Rank #4 (Sell).

Key Picks

Some better-ranked stocks in the Zacks Retail-Wholesale sector are Tecnoglass Inc. (TGLS - Free Report) , Wingstop Inc. (WING - Free Report) and Domino's Pizza, Inc. (DPZ - Free Report) .

Tecnoglass currently carries a Zacks Rank #2 (Buy). TGLS has a trailing four-quarter earnings surprise of 26.9%, on average. Shares of the company have gained 44.9% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for TGLS’ 2023 sales and earnings per share (EPS) suggests growth of 11.2% and 9%, respectively, from the year-ago period’s estimated levels.

Wingstop currently carries a Zacks Rank #2. WING has a long-term earnings growth rate of 12%. Shares of WING have lost 5.9% in the past year.

The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.4% and 16.3%, respectively, from the year-ago period’s estimated levels.

Domino's currently carries a Zacks Rank #2. DPZ has a long-term earnings growth rate of 12.6%. Shares of DPZ have declined 28.7% in the past year.

The Zacks Consensus Estimate for Domino's 2023 sales and EPS suggests growth of 3.8% and 17.2%, respectively, from the year-ago period’s estimated levels.

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