Core Insights - Wendy's Co (NASDAQ:WEN) is set to announce its first-quarter earnings on May 2, with significant options trading activity indicating heightened interest and potential volatility ahead of the report [1][2] - The current sentiment among options traders is leaning bearish, as evidenced by a high call/put volume ratio of 7.99, which ranks in the 98th percentile of annual readings [2] - Historically, Wendy's stock has shown mixed performance post-earnings, with an average next-day swing of 2.3% over the last two years, but current options pricing suggests a larger expected move of 7.1% [3] Stock Performance - Wendy's stock is currently trading at $12.47, down 1%, and is close to its five-year low of $12.05 reached on April 9 [4] - The stock has experienced a 23.5% year-to-date decline and has been under pressure from a descending 20-day moving average since late March [4] - The stock's rally attempts have been capped at the $16 level in late February, indicating resistance in the current market environment [4] Volatility Expectations - Wendy's stock has historically outperformed options traders' volatility expectations, as indicated by a Schaeffer's Volatility Scorecard (SVS) rating of 94 out of 100 [7]

Company Overview - Wendy's is expected to report quarterly earnings of $0.20 per share, reflecting a year-over-year decline of 13% [3] - Revenues are anticipated to be $523.98 million, down 2% from the same quarter last year [3] - The consensus EPS estimate has been revised 2.84% lower in the last 30 days, indicating a bearish sentiment among analysts [4] Earnings Expectations - The stock may rise if actual earnings exceed expectations in the upcoming report, scheduled for May 2 [2] - Conversely, if earnings fall short, the stock could decline [2] - The Earnings ESP for Wendy's is -1.14%, suggesting analysts have become more pessimistic about the company's earnings prospects [11] Historical Performance - In the last reported quarter, Wendy's exceeded expectations by delivering earnings of $0.25 per share against an estimate of $0.24, resulting in a surprise of +4.17% [12] - Over the past four quarters, Wendy's has beaten consensus EPS estimates two times [13] Industry Context - In the Zacks Retail - Restaurants industry, BJ's Restaurants is expected to post earnings of $0.40 per share, indicating a year-over-year increase of 25% [17] - BJ's Restaurants' revenue is projected to be $347.94 million, up 3.2% from the previous year [17] - The consensus EPS estimate for BJ's has been revised down by 0.7% in the last 30 days, and it has an Earnings ESP of -5.23% [18]

Core Viewpoint - Wendy's stock has experienced a significant decline of 18.9% over the past month, primarily due to macroeconomic challenges, stiff competition, and high operating costs [1][17]. Financial Performance - For fiscal 2025, Wendy's projects commodity inflation of about 1% and wage inflation of approximately 4%, with total costs and expenses expected to rise 1% year over year to $1.9 billion [2]. - The stock closed at $12.54, which is 39% below its 52-week high of $20.65, and has underperformed compared to industry peers [3]. Sales Growth - Wendy's reported robust global same-restaurant sales growth, with international restaurants (excluding Argentina) seeing a 4.9% year-over-year increase in the fourth quarter of fiscal 2024, compared to 4.3% a year ago [6]. - The company’s breakfast sales grew over 6% year over year in 2024, outperforming the QSR burger category, driven by increased brand awareness and product innovation [8]. Strategic Initiatives - Wendy's plans to sustain breakfast momentum through product innovation, strategic partnerships, and targeted promotions, reallocating advertising funds to enhance customer experience [9]. - The company expanded its system footprint by opening 276 restaurants globally in fiscal 2024 and anticipates opening between 150 and 200 units in 2025, with a focus on international markets [10][11]. Valuation - Wendy's is currently valued at a discount compared to the industry on a forward 12-month P/E basis, with a ratio of 12.16 [12]. - Earnings estimate revisions for 2025 indicate a projected decline of 0.1% in sales and 1% in EPS, contrasting with growth expectations for competitors [16].

Core Concept - Wendy's is introducing new variations of its iconic Frosty dessert, including Frosty Swirls and Frosty Fusions, to enhance customer experience and cater to evolving consumer preferences for customization and new flavors [1][2][3]. Product Innovations - Frosty Swirls will be available starting April 11 in the Wendy's app and nationwide on April 15, allowing customers to choose their favorite Frosty flavor and select from three indulgent sauces [2][4]. - Frosty Fusions, launching nationwide on May 12, will allow customers to add sauces and mix-ins, providing a new way to enjoy the Frosty [3][4]. Customer Experience Enhancements - Wendy's has updated in-restaurant equipment to ensure the perfect mix for Frosty Fusion treats and introduced a new cup design with a domed lid for better enjoyment [4]. - A custom blue Frosty spoon has been created to enhance the experience, allowing customers to enjoy every bit of the dessert [4]. Flavor Options - New Frosty Swirl flavors include Strawberry Frosty Swirl, Caramel Frosty Swirl, and Brownie Batter Frosty Swirl, each offering unique taste experiences [6]. - Frosty Fusions feature innovative combinations such as Pop-Tarts Strawberry Frosty Fusion and OREO Brownie Frosty Fusion, marking the first time these popular snacks are offered as mix-ins in the quick-service restaurant industry [6].

Core Points - The Wendy's Company will release its first quarter 2025 results on May 2, 2025, before the market opens [1] - A conference call will be held on the same day at 8:30 a.m. ET, with a webcast available on the Company's Investor Relations website [2] Company Overview - The Wendy's Company operates over 7,000 restaurants globally and employs hundreds of thousands of people [3] - Founded in 1969, Wendy's is known for its fresh, made-to-order square hamburgers and popular menu items like the Spicy Chicken Sandwich and Frosty dessert [3] - The company supports the Dave Thomas Foundation for Adoption, which aims to increase adoptions from North America's foster care system [3]

Core Points - Wendy's is promoting its $1 Jr. Bacon Cheeseburger and $1 Double Stack as part of its March Madness campaign, running until April 13, 2025, emphasizing the freshness of its beef offerings [1][2][4] - The campaign includes various promotional deals through delivery partners like DoorDash, Uber Eats, and GrubHub, enhancing customer engagement during the tournament [5] Company Overview - The Wendy's Company operates over 7,000 restaurants globally and is known for its commitment to fresh, made-to-order food, including its signature square hamburgers [6] - Wendy's supports the Dave Thomas Foundation for Adoption, aiming to increase adoptions from the foster care system in North America [6] Marketing Strategy - The marketing campaign leverages the excitement of March Madness to attract customers, with endorsements from sports commentators Ian Eagle and Clark Kellogg highlighting the quality of Wendy's hamburgers [4] - Wendy's is utilizing its mobile app to facilitate promotions, encouraging customers to engage with the brand digitally [1][8]

Core Viewpoint - Wendy's Company is experiencing growth driven by strong same-restaurant sales, particularly in U.S. breakfast and digital sales, while facing challenges from high commodity and labor costs [1] Growth Drivers of WEN - The company reported a 4.9% year-over-year increase in same-restaurant sales at international locations (excluding Argentina) during Q4 of fiscal 2024, compared to 4.3% the previous year [2] - Global same-restaurant sales increased by 4.3% year-over-year, up from 1.3% in the prior-year quarter, with U.S. sales growing 4.1% compared to 0.9% a year ago [2] - Innovative offerings and value propositions are expected to enhance customer satisfaction and sustain margins throughout 2025 [3] - Breakfast sales grew over 6% year-over-year in 2024, outperforming the QSR burger category, driven by brand awareness and product innovation [4] - The company plans to maintain breakfast momentum through product innovation, strategic partnerships, and targeted promotions in 2025 [5] Expansion and Unit Growth - Wendy's opened 276 new restaurants globally in fiscal 2024 while closing underperforming units, expecting new locations to deliver double the average unit volumes (AUVs) of closed restaurants [6] - The company anticipates net unit growth of 2% to 3% in 2025, with plans to open 150 to 200 new units, primarily in international markets [7] Factors Hurting WEN - General and administrative expenses rose 2.3% year-over-year to $67.2 million in Q4 of fiscal 2024, driven by increased incentive compensation and employee benefits [8] - Inflationary pressures on commodities and labor are impacting costs, with projected commodity inflation of about 1% and wage inflation of approximately 4% for fiscal 2025 [9] - Total costs and expenses are expected to rise 1% year-over-year to $1.9 billion in 2025 [9]

Summary of Key Points Core Viewpoint - Wendy's has been rated as a hold, with concerns about its limited growth and unsustainable dividend yield, leading to a decline in stock price since the last analysis [1]. Company Analysis - The company has experienced relatively little growth, which raises concerns about its future performance [1]. - The dividend yield is viewed as not particularly sustainable, contributing to the cautious outlook on the stock [1]. - The stock price has dropped since the last evaluation, indicating potential investor dissatisfaction or market challenges [1].

Shares plans to update core menu items and launch impactful innovation to meet consumer preferences and win in fast growing segments Details increased investments in technology and operations to enhance the customer experience Outlines expectations to add 1,000 net new restaurants globally by 2028 Announces long-term financial algorithm of 3-4% annual net unit growth, 5-6% annual systemwide sales growth, and 7-8% annual adjusted EBITDA growthDUBLIN, Ohio, March 6, 2025 /PRNewswire/ -- The Wendy's Company ...

Milestone marks significant progress towards expanding the brand's global presenceDUBLIN, Ohio, Feb. 28, 2025 /PRNewswire/ -- The Wendy's Company announced today a major global growth milestone with the opening of the 500th Wendy's® restaurant in the Asia Pacific, Middle East and Africa (APMEA) region. The restaurant, located in Nagano, Japan, is owned and operated by franchisee Wendy's Japan K.K. and features the brand's new Global Next Gen design, which blends modern, innovative design with cutting-edge t ...