Wendy's Q1 filled with performance decreases
Wendy's reported a flurry of decreases in its financial performance measures for Q1 2017, but said in its news release that it also wrapped up 17 straight quarters of same-store sales growth this first quarter of the year, ending on April 2.
The brand is on target to pocket $35 million of G&A expense savings by 2020, as previously stated in its goals for the future.
"We are pleased with our solid first quarter results as we were able to deliver high quality of earnings despite tough prior year comparisons," President and CEO Todd Penegor said in a news release.
Other Q1 highlights include:
- North America same-restaurant sales up 1.6 percent this quarter over the same quarter last year.
- 33 new restaurants opened worldwide.
- 24.6 decrease in total revenues from last year Q1, to $285.8 million, attributed to 301 fewer company-operated restaurants this year.
- 50-basis point drop in company-operated restaurant margin to 16.7 percent Q1 2017 over last year Q1, attributed to higher labor rates.
- 4.9 percent drop in operating profit to $60.7 million in Q1 2017 over last year, attributed to a year-over-year increase in other operating expense.
- 12.2 percent drop in net income to $22.3 million. 530 basis-point increase in adjusted EBITDA margin to 31.2 percent attributed to brand's system optimization initiative.
- 18.2 percent drop in adjusted earnings per share to $0.09
The company will issue a quarterly cash dividend of $0.07 per share on June 15, 2017, to shareholders of record as of June 1, 2017. Changes in the company's outlook included:
- Company-operated restaurant margin of approximately 18.5 percent.
- Commodity cost inflation of approximately 1.5 to 2.0 percent compared to 2016.
- General and administrative expense at the low end of its previously issued range of approximately $210 to $220 million.