Wendy's profit spikes as breakfast whets appetites
North American same-store sales rose 4.3 percent
MKM Partners restaurant analyst Brett Levy discusses Wendy's competition in the fast-food breakfast market.
Wendy’s reported higher fourth-quarter profit and revenue, driven by higher sales at company-operated restaurants and increased franchise royalties.
The Dublin, Ohio-based fast-food chain's fourth-quarter earnings rose 41 percent to $26.5 million, or 11 cents a share. Adjusted profit was 8 cents a share, in line with estimates. Total revenue climbed 7.4 percent to $427.2 million while North American same-store sales grew 4.3 percent.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WEN | THE WENDY'S CO. | 18.11 | +0.19 | +1.06% |
“We have momentum in our business as evidenced by our accelerating sales growth in the second half of the year, which sets us up well going into 2020,” CEO Todd Penegor said in a statement. “Our focus remains on efficient, accelerated growth behind our three major growth pillars: entering the breakfast daypart, growing our digital business, and expanding our international footprint.”
For the full-year, Wendy's profit fell 70 percent year-over-year to $136.9 million. The drop was mostly due to the sale of the company's ownership interest in Inspire Brands for $450 million. Revenue climbed 7.5 percent to $1.71 billion.
Looking ahead, Wendy's expects adjusted 2020 earnings of 60 cents to 62 cents a share, below the 65 cents that Wall Street analysts surveyed by Refinitiv projected. Global sales will be $12 billion to $12.5 billion, the company predicted.
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Wendy's shares have risen 3.4 percent this year, outperforming the S&P 500's 3.2 percent decline.