Wendy’s Company Earnings: Increased Costs Strain Margins, Stock Falling Now

Wendy’s Company (The) (NYSE:WEN) reported its results for the second quarter. Wendy’s Arby’s Group is a quick service restaurant company, which is comprised of the Wendy’s and Arby’s brands.

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Wendy’s Company (The) Earnings Cheat Sheet

Results: Reported a loss of $5.5 million (one cent per diluted share) in the quarter. Wendy’s Company (The) had a net income of $11.3 million or 3 cents per share in the year-earlier quarter.

Revenue: Rose 3.8% to $645.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Wendy’s Company (The) reported adjusted net income of 5 cents per share. By that measure, the company fell in line with the mean estimate of 5 cents per share. It beat the average revenue estimate of $609.1 million.

Quoting Management: President and Chief Executive Officer Emil Brolick said: “We are building a solid foundation for the reimaging of our system, which is very exciting for our customers, operators and franchisees. Image Activation is one of the most important elements of Wendy’s ‘Recipe to Win’ growth strategy. It elevates the customer experience with innovative exterior and interior designs for new units and reimages.

Key Stats:

A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the first quarter, which saw a 30% decrease.

The company fell in line with estimates last quarter after missing forecasts in the previous quarter with net income of one cent versus a mean estimate of net income of 3 cents per share.

The company’s loss in the latest quarter follows profits in the previous two quarters. The company reported a profit of $12.3 million in the first quarter and a profit of $4 million in the fourth quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from 6 cents a share to 5 cents over the last ninety days. For the fiscal year, the average estimate has moved down from 18 cents a share to 15 cents over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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