The Wendy's Co (WEN, Financial) released its 8-K filing on February 13, 2025, detailing its financial performance for the fourth quarter and full year of 2024. The company reported a notable increase in systemwide sales and earnings, surpassing analyst estimates and demonstrating resilience in a competitive market.
Company Overview
The Wendy's Company is the second-largest burger quick-service restaurant (QSR) chain in the United States by systemwide sales, with $12.3 billion in 2023. The company operates nearly 7,157 stores across 30 countries, focusing on hamburgers, chicken sandwiches, salads, and fries. Wendy's generates revenue through company-owned stores, franchise royalty and marketing fund payments, and franchise flipping and advisory fees.
Performance and Challenges
In the fourth quarter, Wendy's systemwide sales grew by 5.4%, reaching $3.7 billion, with same-restaurant sales growth of 4.3%. For the full year, systemwide sales increased by 3.1% to $14.5 billion. These figures highlight Wendy's ability to maintain growth despite challenges such as labor rate inflation and customer count declines. The company's focus on increasing average check sizes and labor efficiencies contributed to its success.
Financial Achievements
Wendy's reported total revenues of $574.3 million for the fourth quarter, exceeding the analyst estimate of $563.64 million. The adjusted revenues were $459.3 million, marking a 6.4% increase. For the full year, total revenues reached $2.2 billion, slightly below the annual estimate of $2.23455 billion. The company's net income for the fourth quarter was $47.5 million, with an adjusted EBITDA of $137.5 million, reflecting an 8.6% increase.
Key Financial Metrics
The company's reported diluted earnings per share (EPS) for the fourth quarter was $0.23, slightly below the estimated EPS of $0.24. However, the adjusted EPS was $0.25, surpassing expectations with a 19.0% increase. For the full year, the reported EPS was $0.95, aligning with the annual estimate, while the adjusted EPS was $1.00, a 3.1% increase.
| Metric | Q4 2024 | Full Year 2024 |
|---|---|---|
| Total Revenues | $574.3 million | $2.2 billion |
| Adjusted Revenues | $459.3 million | $1.8 billion |
| Net Income | $47.5 million | $194.4 million |
| Adjusted EBITDA | $137.5 million | $543.6 million |
| Reported EPS | $0.23 | $0.95 |
| Adjusted EPS | $0.25 | $1.00 |
Analysis and Outlook
Wendy's performance in the fourth quarter and full year of 2024 underscores its strategic focus on enhancing operational efficiencies and expanding its market presence. The company's ability to exceed revenue and adjusted EPS estimates highlights its resilience and adaptability in a challenging economic environment. The updated capital allocation policy, including a new target dividend payout ratio and share repurchase plans, reflects Wendy's commitment to maximizing shareholder value.
“I am proud of our fourth quarter performance, delivering a strong quarter while outpacing the category. This resulted in our 14th consecutive year of global same-restaurant sales growth,” said Kirk Tanner, President and Chief Executive Officer.
As Wendy's continues to navigate the competitive landscape, its focus on strategic growth initiatives and capital allocation will be crucial in sustaining its momentum and achieving long-term success.
Explore the complete 8-K earnings release (here) from The Wendy's Co for further details.
