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Wendy's Reports on 3rd Quarter of Fiscal 2023


On November 2nd the Wendy's Company (WEN) reported on results for the 3rd quarter of FY 2023 ending October 1st 2023. The Company beat Zack’s estimate on EPS but was 0.7 percent light on the top line. For the quarter, the company earned $58.1 million on total revenue of $550.6 million with a diluted EPS of $0.28.  For the 3rd quarter of 2022, comparable figures were net income of $50.5 million on total revenue of $532.6 million with an EPS of $0.24.


Revenue was 3.4 percent higher than for the 3rd quarter of 2022 and operating margin advanced from 18.4 percent to 18.5 percent for the most recent quarter.


Growth in same-restaurant sales for the 3rd quarter of 2023 compared to the corresponding quarter in fiscal 2022 attaining 6.4 percent for the U.S., International was up 10.8 percent with a global average of 6.9 percent. For fiscal 2023, the Wendy's Company expects global system wide sales to grow seven to eight percent with adjusted EPS of $0.95-$1.00 and with a capital expenditure of $80-$85 million.


In commenting on Q2 results on the investors’ call, Todd Penegor, president and CEO stated, “We continued to make meaningful progress across our strategic growth pillars during the third quarter,” He added, “Global same-restaurant sales accelerated on a 2-year basis and digital sales grew 30 percent versus the prior year, driving another quarter of Company-operated restaurant margin expansion. Additionally, we have now opened 152 new restaurants across the globe this year and further solidified our development pipeline through significant new agreements in key growth markets. This success drives best in class franchisee satisfaction and alignment. We remain relentlessly focused on delivering meaningful global growth, supported by compelling restaurant economic model improvement and acceleration across our strategic pillars.”


On October 1st the Wendy's Company posted total assets of $5,499 million of which $2,021 million comprised intangibles and goodwill.  The company carries $4,285 million in long-term debt, lease and finance liabilities.


The Wendy's Company has a market capitalization of $3,930 million and has traded over the past fifty-two weeks in a range of $18.19 to $23.90 with a 50-day moving average of $19.64.  On a trailing twelve-month basis, operating margin was 18.6 percent and profit margin 9.1 percent.  The company generated a return on assets of 4.4 percent and 51.0 percent on equity. 


WEN closed at $18.68 on Wednesday, November 2nd before the release, and closed on Friday November 4th at $19.24.