Operations

Wendy's Q4 results miss estimates ... barely

Photo: iStock.

March 3, 2021

Although Wendy's Q4 adjusted EPS fell a penny short of analysts' estimates of 18 cents per share, the company managed to exceed the previous year's quarterly result of 8 cents per share by more than 112%. Revenues of $474.3 million also fell short of estimates of $480.6 million, but were 11% higher than the year-ago quarter's figure of $427.2 million, according to results released by the company this morning.

Operationally, Wendy's Q4 systemwide sales globally grew 13.2% compared to 5.9% the previous year's quarter, helping to buoy full-year systemwide sales growth in 2020 up 4.8% versus 2019 full-year growth of 4.2%.

"I could not be more proud of our results and the work that was done by the Wendy's System across the globe in 2020 with all the challenges we faced and overcame during the year," Wendy's President and CEO Todd Penegor said in a press release. "I am confident that we have emerged as a stronger, more unified brand that is poised to deliver outsized growth" President and Chief Executive Officer Todd Penegor said. "We accomplished a lot in 2020, including securing our position as the #2 QSR hamburger restaurant chain in the U.S., achieving our two highest quarterly Global same restaurant sales results in over 15 years, launching our highly successful breakfast daypart, more than doubling our digital sales, enhancing our restaurant economic model, and continuing to enhance access to our brand with net new restaurant development.

"As we turn the page to 2021, we remain confident in our playbook of investing smartly to drive accelerated growth behind our three major long-term growth pillars: significantly building our breakfast daypart, accelerating our digital business, and expanding our footprint, both Internationally and in the U.S."

Additional key highlights for the quarter that ended Jan. 3, 2021, include:

• 4.7% same-store sales growth versus 4.3% growth the previous year's quarter.
• $3.118 billion in global systemwide sales versus $2.751 billion the previous year's quarter.
• 14 net new store openings, versus 45 in the previous year's quarter.
• $38.7 million net income versus $26.5 million the previous year's quarter.
• Adjusted EBIDTA was $114.5 million, versus $83.4 million the previous year's quarter.

Additional key full-year results include:

• 1.2% increase in 2020 same-store sales versus 2.9% increase in 2019.
• 2020 systemwide sales grew to $11.339 billion, versus $10.944 billion the previous year.
• 29 net new store openings in 2020 versus 42 in 2019.
• Net income fell 14% in 2020 to $117.8 million from $136.9 million the previous year.
• Adjusted EBIDTA grew 1.8% in 2020 to $420.1 million, versus $412.8 million the previous year.

Last week,the company's board authorized a 29% increase in its quarterly cash dividend rate, taking it from 7 cents to 9 cents per share. The increase is effective with the next quarterly dividend payment, payable on March 15 to shareholders of record as of March 5. The approximate number of common shares outstanding as of Feb. 19 was 223.9 million.