Food & Beverage

Wendy’s reports strong Q2 2021 results driven by positive same-store sales

Logo provided.

August 12, 2021

The Wendy's Co. reported strong sales and earnings gains for the second quarter of 2021 over the prior year, primarily driven by higher sales at company-operated restaurants, according to a press release.

The company reported a 22.6% revenue gain from $402.3 million in Q2, 2020 to $493.3 million for the quarter ending July 4, 2021.

Adjusted revenues rose 20.6% from 4324.2 million to $391.1 million in the comparative quarters.

Net income jumped 163.9% from $24.9 million to $65.7 million.

Diluted earnings per share jumped 163.6% from 11 cents to 29 cents, while adjusted earnings per share climbed 125% from 12 cents to 27 cents.

These increases were primarily driven by positive same-store restaurant sales.

Revenues also increased due to higher franchise fees primarily as the result of the company's new technology fee that was implemented in 2021.

The increase in net income resulted primarily from higher operating profit, partially offset by a loss on early extinguishment of debt that the company incurred as part of its debt refinancing completed in the second quarter of 2021.

The company also announced a 20% increase in its regular quarterly cash dividend to 12 cents per share, payable on Sept. 15, 2021, to stockholders of record as of Sept. 1, 2021.

The $493.3 million in quarterly revenue beat analyst expectations by $30.69 million, while the non-GAAP of 27 cents beat expectations by 9 cents and the GAAP EPS of 29 cents beat expectations by 11 cents, according to Seeking Alpha.

Shares traded Wednesday at $22.85 against a 52-week range of $18.86-$29.46.

"Our robust growth continued in the second quarter, as sales significantly exceeded our expectations, leading to restaurant level margins of more than 20% and record profits, fueling our restaurant economic model," President and CEO Todd Penegor said in the release. "We are also excited to meaningfully increase our 2025 global restaurant target to 8,500 to 9,000, driven by a development commitment with REEF Kitchens, a new build to suit development fund, and incremental commitments through our latest new restaurant incentive program."

For 2021, the company expects global systemwide sales growth of 11% to 13% excluding the impact of the 53rd week, with adjusted earnings per share of 79 to 81 cents.