First Quarter 2025 Conference Call May 2, 2025 Aaron Broholm Head of Investor Relations Agenda Business Update Q1 Financial Results 2025 Financial Outlook IR Calendar Q&A THE WENDY'S COMPANY | 3 FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES This presentation, and certain information that management may discuss in connection with this presentation, contains certain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Re ...

Wendy’s Co WEN shares were rising in early trading on Monday, despite the company announcing on Friday downbeat first-quarter sales.The announcement came amid an exciting earnings season. Here are some key analyst takeaways.Truist Securities On Wendy’sAnalyst Jake Bartlett maintained a Buy rating, while reducing the price target from $17 to $16.Wendy’s reported first-quarter adjusted EBITDA of $124.5 million, beating consensus of $122.1 million, Bartlett said in a note. He added, however, that U.S. same-sto ...

Core Insights - Wendy's is anticipating financial pressure on customers for the remainder of the year, leading to a focus on value offerings to attract diners after a 2.1% decline in same-store sales [1][2] - The company is launching new initiatives such as Frosty Fusions and a "100 Days of Summer" program to drive traffic and enhance customer engagement [2] - Technological investments are being made to improve customer experience, including enhancements to the mobile app, loyalty program, and digital menu boards [3] Technological Enhancements - Wendy's is collaborating with Palantir to improve its supply chain through a digital twin that tracks the supply chain network in real time across 3,500 transportation units [4] - The digital twin system alerts Wendy's to potential stock shortages and helps manage raw material orders efficiently [5] - An example of the system's effectiveness is its ability to resolve a network-wide shortage of 10,200 cases of syrup in five minutes, a task that previously required extensive manual effort [6]

Core Viewpoint - Wendy's Company reported first-quarter fiscal 2025 results with earnings meeting expectations but revenues falling short, reflecting a decline in global systemwide sales primarily due to lower same-restaurant sales in the U.S. [1][3] Financial Performance - Adjusted earnings per share (EPS) were 20 cents, matching the Zacks Consensus Estimate, down from 23 cents in the prior-year quarter [3] - Total revenues were $523.5 million, missing the consensus mark by 0.1% and declining 2.1% year over year; adjusted revenues (excluding advertising funds) fell 1.6% to $423.1 million [3] - Net income decreased to $39.2 million, down 6.7% from $42 million in the year-ago quarter; adjusted EBITDA totaled $124.5 million, down 2.6% from $127.8 million [8] Sales and Restaurant Performance - Global system-wide sales declined 1.1% year over year, with U.S. sales down 2.6% while international sales increased by 8.9% [5] - Same-restaurant sales in the U.S. fell 2.8% year over year, compared to a 0.6% increase in the prior-year quarter; international same-restaurant sales rose 2.3% [4] Operational Highlights - U.S. company-operated restaurant margin was 14.8%, down 50 basis points year over year due to commodity inflation and labor rate inflation, partially offset by increased average check and labor efficiencies [6] - General and administrative expenses rose 6.9% year over year to $68.2 million, driven by increased employee compensation and benefits [7] Balance Sheet and Cash Flow - Cash and cash equivalents as of March 31, 2025, totaled $335.3 million, down from $450.5 million on December 29, 2024; long-term debt remained at $2.66 billion [9] - Free cash flow is now expected to be between $250 million and $270 million, revised down from a prior estimate of $275 million to $285 million [12] Dividend and Future Outlook - A quarterly dividend of 14 cents per share was declared, payable on June 16, 2025 [10] - The company revised its outlook for global system-wide sales growth to between -2% to flat, and adjusted EBITDA is now predicted to be between $530 million and $545 million [11]

The Wendy’s Company (WEN) Q1 2025 Earnings Call May 02, 2025 08:30 AM ET Company Participants Aaron Broholm - Head of Investor RelationsKirk Tanner - CEO, President & DirectorKen Cook - CFODavid Palmer - Senior Managing DirectorDennis Geiger - Executive Director - Equity ResearchJon Tower - Director & Equity Research - Consumer & RestaurantsLauren Silberman - DirectorMargaret-May Binshtok - VP - Equity ResearchAndrew Charles - Managing DirectorRahul Krotthapalli - Vice President - Equity ResearchChris O’Cul ...

Wendy's (WEN) came out with quarterly earnings of $0.20 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.23 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this hamburger chain would post earnings of $0.24 per share when it actually produced earnings of $0.25, delivering a surprise of 4.17%.Over the last four quarters, the company has surpassed consensus EPS estimates just once.Wendy's, which belongs to the Zac ...

The Wendy’s Company (WEN) Q1 2025 Earnings Call May 02, 2025 08:30 AM ET Speaker0 Good morning. Welcome to The Wendy's Company Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. You may begin your conference. Good morning, and thank Speaker1 you for joining our fiscal twenty twenty five first quarter earnings conference call. After this brief introduction, Kirk Tanner, Pres ...

Financial Performance - Global systemwide sales decreased 1.1% to $3.39 billion in the first quarter of 2025 compared to $3.45 billion in the first quarter of 2024[121] - Revenues decreased 2.1% to $523.5 million in the first quarter of 2025 compared to $534.8 million in the first quarter of 2024[121] - Global same-restaurant sales decreased 2.1%, with U.S. same-restaurant sales decreasing 2.8% and international same-restaurant sales increasing 2.3% compared to the first quarter of 2024[121] - Income before income taxes decreased 4.4% to $54.9 million in the first quarter of 2025 compared to $57.5 million in the first quarter of 2024[121] - Net income for the first quarter of 2025 was $39.2 million, down from $42.0 million in the first quarter of 2024[124] - Total revenues for the first quarter of 2025 were $523.5 million, a decrease of 2.4% from $534.8 million in 2024[125] Restaurant Operations - During the three months ended March 30, 2025, Wendy's added 68 net new restaurants across the system[122] - Company-operated restaurants comprised approximately 5% of the total Wendy's system as of March 30, 2025[110] - The total number of restaurants increased to 7,308 by the end of Q1 2025, with a net addition of 68 restaurants compared to the previous year[129] Sales and Margins - Global Company-operated restaurant margin was 14.3% in the first quarter of 2025, a decrease of 40 basis points compared to the first quarter of 2024[121] - U.S. same-restaurant sales for company-operated locations decreased by 1.2% in Q1 2025, compared to a decrease of 0.8% in Q1 2024[127] - The company-operated restaurant margin in the U.S. was $31.5 million, representing 14.8% of sales in Q1 2025, down from 15.3% in Q1 2024[131] Digital Sales - Digital sales increased from approximately 16.8% of global systemwide sales during the first quarter of 2024 to approximately 20.3% during the first quarter of 2025[120] Franchise and Royalties - Franchise royalty revenue and fees decreased to $145.1 million in the first quarter of 2025 from $146.6 million in the first quarter of 2024[124] - Franchise royalty revenue decreased by $4.0 million to $121.7 million in Q1 2025, primarily due to a 2.2% decrease in global franchise same-restaurant sales[132] Costs and Expenses - Total cost of sales as a percentage of sales increased to 85.7% in Q1 2025 from 85.3% in Q1 2024, driven by higher commodity costs and increased labor rates[136] - General and administrative expenses rose to $68.2 million in Q1 2025, up from $63.8 million in Q1 2024, primarily due to higher employee compensation[140] Other Financial Metrics - Advertising funds revenue decreased to $100.4 million in Q1 2025 from $104.9 million in Q1 2024, reflecting a net decrease in franchise same-restaurant sales[135] - The company recognized a net system optimization loss of $0.1 million in Q1 2025, consistent with the previous year[143] - Impairment of long-lived assets decreased to $1.4 million in Q1 2025 from $2.0 million in Q1 2024, attributed to lower impairment charges from certain underperforming restaurants[145] - Other operating income increased by $4.0 million to $6.3 million in Q1 2025, primarily due to a claim settlement[146] - Interest expense, net decreased by $1.0 million to $30.5 million in Q1 2025, attributed to lower interest income from amended leases[147] - The company recorded an investment loss of $1.7 million in Q1 2025 due to impairment charges on equity securities[148] Cash Flow and Financing - Cash provided by operating activities was $85.4 million in Q1 2025, down from $100.0 million in Q1 2024, primarily due to timing of marketing expense payments[165] - Cash used in financing activities rose to $179.3 million in Q1 2025, an increase of $106.7 million from Q1 2024, mainly due to higher stock repurchases[167] - The company had $389.0 million in cash, cash equivalents, and restricted cash as of March 30, 2025, with an additional $300.0 million available from a revolving financing facility[158] Tax and Share Repurchase - The effective tax rate increased to 28.6% in Q1 2025 from 26.9% in Q1 2024, influenced by adjustments related to deferred income taxes and state income taxes[150] - The company repurchased 8.2 million shares for $124.1 million under the stock repurchase program during Q1 2025, with $110.9 million remaining under the authorization[160]

Financial Performance - Global systemwide sales were $3.4 billion, a decrease of 1.1% compared to the previous year[4]. - Total revenues for the first quarter of 2025 were $523.5 million, a decrease of 2.1% year-over-year[5]. - Net income for the first quarter was $39.2 million, down 6.7% from the previous year[5]. - The Company reported revenues of $534.8 million for the three months ended March 31, 2024, compared to $523.5 million for the same period in 2025, reflecting a decrease of approximately 2.4%[37]. - Net income for the three months ended March 31, 2024, was $42.0 million, down from $39.2 million in 2025, representing a decline of about 4.3%[37]. - Adjusted EBITDA decreased to $127.8 million in 2024 from $124.5 million in 2025, indicating a decline of approximately 2.6%[43]. - Adjusted earnings per share decreased by 13.0% to $0.20[5]. - Diluted earnings per share fell from $0.20 in Q1 2024 to $0.19 in Q1 2025, a decrease of 5%[46]. Sales and Restaurant Performance - U.S. same-restaurant sales declined by 2.8%, while international same-restaurant sales grew by 2.3%[3]. - The company added 68 net new restaurants, contributing to a total restaurant count of 7,308 globally[4]. - Digital sales mix reached a record 20.3% of total sales[4]. - Same-restaurant sales and systemwide sales growth are calculated on a constant currency basis, excluding the impact of foreign currency translation for better year-over-year comparability[33]. Cash Flow and Liquidity - Free cash flow increased by 21.4% to $68.0 million[5]. - Cash and cash equivalents decreased from $450.5 million in December 2024 to $335.3 million in March 2025, a decline of about 25.6%[39]. - Net cash provided by operating activities decreased from $99,987,000 in Q1 2024 to $85,415,000 in Q1 2025, a decline of about 14.7%[49]. - The Company’s free cash flow is defined as cash flows from operations minus capital expenditures and other specified expenses, highlighting its importance for liquidity and investment opportunities[25]. Shareholder Returns and Capital Management - The company expects full-year adjusted EBITDA to be between $530 million and $545 million[18]. - The company plans to return $173.5 million to shareholders through dividends and share repurchases[4]. - Total liabilities increased slightly from $4.775 billion in December 2024 to $4.789 billion in March 2025, reflecting a growth of approximately 0.3%[39]. Advertising and Marketing - The Company’s advertising funds revenue decreased from $104.9 million in 2024 to $100.4 million in 2025, a decline of approximately 4.3%[37]. - Advertising funds revenue decreased from $104,944,000 in Q1 2024 to $100,360,000 in Q1 2025, a decline of about 4.6%[46]. - The company reported a net change in advertising funds impact from $(21,850,000) in Q1 2024 to $6,093,000 in Q1 2025, showing a significant turnaround[49]. Cost Management - Reorganization and realignment costs were $5,673,000 in Q1 2024, compared to a credit of $(692,000) in Q1 2025, indicating a shift in expenses[46]. - Capital expenditures were $17,354,000 in Q1 2024 and $17,679,000 in Q1 2025, indicating a slight increase[49]. Operating Performance - The Company’s operating profit rose from $81.2 million in 2024 to $83.1 million in 2025, an increase of about 2.4%[37]. - The number of shares used to calculate diluted income per share decreased from 206.9 million in 2024 to 201.6 million in 2025[37].

Core Insights - The Wendy's Company reported a decline in total revenues and net income for the first quarter of 2025, primarily due to lower sales in U.S. Company-operated restaurants and decreased franchise royalty revenue [5][8][12] - The company achieved systemwide sales growth of 8.9% in its International segment, while U.S. systemwide sales declined by 2.6% [2][9] - Wendy's added 68 net new restaurants globally and aims for a full-year net unit growth of 2-3% [2][9] Operational Highlights - Systemwide sales growth for the first quarter of 2025 was -1.1% globally, with U.S. same-restaurant sales down by 2.8% and International same-restaurant sales up by 2.3% [7][9] - Total systemwide sales reached $3.4 billion, a decrease of 1.1% compared to the previous year [9] - The company increased its global digital sales mix to a record 20.3% [9] Financial Performance - Total revenues for the first quarter of 2025 were $523.5 million, down 2.1% from $534.8 million in the same period of 2024 [5][9] - Net income decreased to $39.2 million, a decline of 6.7% from $42.0 million year-over-year [5][12] - Adjusted EBITDA fell to $124.5 million, down 2.6% from $127.8 million in the prior year [5][13] Cost and Expenses - U.S. Company-operated restaurant margin decreased to 14.8%, down 0.5% from the previous year, primarily due to commodity inflation and labor rate inflation [5][10] - General and administrative expenses increased by 6.9% to $68.2 million, attributed to higher employee compensation and benefits [5][11] Shareholder Returns - The company returned $173.5 million to shareholders through dividends and share repurchases [9] - A quarterly cash dividend of $0.14 per share was declared, payable on June 16, 2025 [14] Future Outlook - The company updated its full-year 2025 outlook to reflect the current consumer environment, maintaining a focus on strategic priorities [2][9] - Capital expenditures are projected to be between $100 million and $110 million, with adjusted earnings per share expected to range from $0.92 to $0.98 [9][19]