Wendy's Profit, Revenue Top Expectations -- Update
February 09 2016 - 8:36AM
Dow Jones News
By Joshua Jamerson
Wendy's Co. reported fourth-quarter profit that beat
expectations as it continues to see benefits from operating fewer
of its restaurants itself.
Shares of Wendy's, up 7.9% over the past three months, rose 3.5%
to $10.50 in light premarket trading as the company also said it
expects same-restaurant sales growth for the current year above
what analysts were expecting.
Wendy's said it sees same-store sales growth in 2016 of about 3%
in North America, above the projection of 2.5% by analysts surveyed
by Consensus Metrix. The company also projected adjusted per-share
earnings between 35 cents and 37 cents, in-line with the consensus
view of 36 cents by analysts polled by Thomson Reuters.
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 earnings 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 because of 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 08:21 ET (13:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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