Wendy’s(WEN)2025-05-02 11:12Financial 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]