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Wendy’s (WEN) Beats on Q2 Earnings & Revenues


The Wendy's Company WEN is one of the leading quick-service restaurant companies that serves hamburgers, chicken breast sandwiches and wraps, chicken nuggets, chili, baked and French fried potatoes, freshly prepared salads, soft drinks and Frosty desserts.

Sales initiatives like menu innovation, limited time offers, marketing initiatives and increased emphasis on core and price value offerings are boosting comps. Additionally, increased investments in technology and re-imaging of restaurants are expected to increase traffic and drive higher sales.

Meanwhile, we note that Wendy’s has been witnessing year over year revenue decline over the past few quarters due to reduced number of company-operated restaurants, resulting from the company’s system optimization initiative. However, as the initiative was completed in fourth-quarter 2016, Wendy’s expects the same to lower G&A expenses and boost earnings going forward.

Still, a soft consumer spending environment in the U.S. restaurant space remains a cause of concern.

Investors should note that the consensus estimate for WEN has hardly witnessed any significant movement over the last 60 days. Meanwhile, WEN’s earnings have been mostly strong over the past few quarters. Notably, the company posted positive earnings surprises in three of the last four quarters, with an average beat of 5.63%. Revenues too outpaced the Zacks Consensus Estimate in three of the trailing four quarters.

Wendy's Company (The) Price and EPS Surprise

WEN currently has a Zacks Rank #2 (Buy) but that could change following Wendy’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: WEN beats on earnings. Our consensus earnings estimate called for earnings per share of 13 cents and the company reported earnings of 15 cents per share. Investors should note that these figures take out stock option expenses.

Revenues: WEN reported revenues of $320.3 million. This surpassed our consensus estimate of $298.7 million.

Key Stats to Note: Comps at North America system restaurants increased 3.2% in second-quarter 2017.

Stock Price Impact: At the time of writing, the stock price of Wendy’s was up 2.8% during pre-market trading hours following the earnings release.

Check back later for our full write up on this WEN earnings report!

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