DUBLIN, Ohio, Feb. 15, 2024 /PRNewswire/ — The Wendy’s Company (NASDAQ:WEN) today reported unaudited results for the fourth quarter and full year ended December 31, 2023.
WEN) is committed to doing the right thing and making a positive difference in the lives of others. This is most visible through the Company’s support of the Dave Thomas Foundation for Adoption® and its signature Wendy’s Wonderful Kids® program, which seeks to find every child in the North American foster care system a loving, forever home. Today, Wendy’s and its franchisees employ hundreds of thousands of people across more than 6,700 restaurants worldwide with a vision of becoming the world’s most thriving and beloved restaurant brand. For details on franchising, connect with us at www.wendys.com/franchising. Visit www.wendys.com and www.squaredealblog.com for more information and connect with us on Twitter and Instagram using @wendys, and on Facebook at
*Fresh” title=”www.facebook.com/wendys.
*Fresh”>www.facebook.com/wendys.
*Fresh
beef available in the contiguous U.S., Alaska, and Canada.” alt=”Wendy’s® was founded in 1969 by Dave Thomas in Columbus, Ohio. Dave built his business on the premise, “Quality is our Recipe®,” which remains the guidepost of the Wendy’s system. Wendy’s is best known for its made-to-order square hamburgers, using fresh, never frozen beef*, freshly-prepared salads, and other signature items like chili, baked potatoes and the Frosty® dessert. The Wendy’s Company (NASDAQ:WEN) is committed to doing the right thing and making a positive difference in the lives of others. This is most visible through the Company’s support of the Dave Thomas Foundation for Adoption® and its signature Wendy’s Wonderful Kids® program, which seeks to find every child in the North American foster care system a loving, forever home. Today, Wendy’s and its franchisees employ hundreds of thousands of people across more than 6,700 restaurants worldwide with a vision of becoming the world’s most thriving and beloved restaurant brand. For details on franchising, connect with us at www.wendys.com/franchising. Visit www.wendys.com and www.squaredealblog.com for more information and connect with us on Twitter and Instagram using @wendys, and on Facebook at
*Fresh” title=”www.facebook.com/wendys.
*Fresh”>www.facebook.com/wendys.
*Fresh
beef available in the contiguous U.S., Alaska, and Canada.”>
“The Wendy’s® system delivered strong sales, profit, and cash flow growth in 2023, all supported by progress on our strategic growth pillars,” President and Chief Executive Officer Kirk Tanner said. “2023 marked the brand’s 13th consecutive year of global same-restaurant sales growth, highlighting the system’s consistent execution and strong franchisee alignment as the team continued to grow the beloved Wendy’s brand. The team also significantly accelerated digital sales, opened nearly 250 new restaurants across the globe, and expanded U.S. Company-operated restaurant margin to pre-COVID levels despite extreme inflationary headwinds in recent years.
“I am excited to begin this next chapter for Wendy’s with new plans and investments to accelerate our global growth, deliver significant restaurant margin expansion, and drive long-term shareholder value. I am looking forward to working with the team to deliver on the significant opportunities ahead.”
Fourth Quarter and Full Year 2023 Summary
See “Disclosure Regarding Non-GAAP Financial Measures” and the reconciliation tables that accompany this release for a discussion and reconciliation of certain non-GAAP financial measures included in this release.
Operational Highlights
Fourth Quarter
Full Year
2022
2023
2022
2023
Systemwide Sales Growth(1)
U.S.
7.2 %
2.3 %
5.3 %
5.1 %
International(2)
16.8 %
9.7 %
19.2 %
14.1 %
Global
8.4 %
3.2 %
6.8 %
6.1 %
Same-Restaurant Sales Growth(1)
U.S.
5.9 %
0.9 %
3.9 %
3.7 %
International(2)
9.9 %
4.3 %
12.4 %
8.1 %
Global
6.4 %
1.3 %
4.9 %
4.3 %
Systemwide Sales (In US$ Millions)(3)
U.S.
$2,976
$3,043
$11,694
$12,285
International(2)
$414
$455
$1,606
$1,802
Global
$3,390
$3,498
$13,301
$14,088
Restaurant Openings
U.S. – Total / Net
38 / (3)
31 / 20
139 / 56
97 / 36
International – Total / Net
40 / 18
65 / 54
137 / 90
151 / 109
Global – Total / Net
78 / 15
96 / 74
276 / 146
248 / 145
Global Reimaging Completion Percentage
79 %
86 %
(1) Systemwide sales growth and same-restaurant sales growth are calculated on a constant currency basis and include sales
by both Company-operated and franchise restaurants.
(2) Excludes Argentina.
(3) Systemwide sales include sales at both Company-operated and franchise restaurants.
Financial Highlights
Fourth Quarter
Full Year
2022
2023
B / (W)
2022
2023
B / (W)
($ In Millions Except Per Share Amounts)
(Unaudited)
(Unaudited)
Total Revenues
$ 536.5
$ 540.7
0.8 %
$ 2,095.5
$ 2,181.6
4.1 %
Adjusted Revenues(1)
$ 431.3
$ 431.7
0.1 %
$ 1,689.3
$ 1,752.6
3.7 %
U.S. Company-Operated Restaurant Margin
15.1 %
13.5 %
(1.6) %
14.3 %
15.3 %
1.0 %
General and Administrative Expense
$ 68.5
$ 65.7
4.1 %
$ 255.0
$ 250.0
2.0 %
Operating Profit
$ 84.0
$ 86.6
3.1 %
$ 353.3
$ 382.0
8.1 %
Reported Effective Tax Rate
29.0 %
30.2 %
(1.2) %
27.2 %
26.8 %
0.4 %
Net Income
$ 41.3
$ 46.9
13.6 %
$ 177.4
$ 204.4
15.2 %
Adjusted EBITDA
$ 123.5
$ 126.6
2.5 %
$ 497.8
$ 535.9
7.7 %
Reported Diluted Earnings Per Share
$ 0.19
$ 0.23
21.1 %
$ 0.82
$ 0.97
18.3 %
Adjusted Earnings Per Share
$ 0.22
$ 0.21
(4.5) %
$ 0.86
$ 0.97
12.8 %
Cash Flows from Operations
$ 259.9
$ 345.4
32.9 %
Capital Expenditures
$ (85.5)
$ (85.0)
0.6 %
Free Cash Flow(2)
$ 213.1
$ 274.3
28.7 %
(1) Total revenues less advertising funds revenue.
(2) Cash flows from operations minus capital expenditures and the impact of our advertising funds.
Fourth Quarter Financial Highlights
Total Revenues
The increase in revenues resulted primarily from an increase in advertising funds revenue and an increase in franchise royalty revenue, both primarily driven by higher same-restaurant sales. These increases were partially offset by lower franchise rental income primarily driven by fewer lease assignments.
U.S. Company-Operated Restaurant Margin
The decrease in U.S. Company-operated restaurant margin was primarily the result of higher commodity costs, customer count declines, and higher labor costs. These were partially offset by a higher average check.
General and Administrative Expense
The decrease in general and administrative expense was primarily driven by a decrease in employee compensation and benefits.
Operating Profit
The increase in operating profit resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, and lower general and administrative expense. These were partially offset by a decrease in U.S. Company-operated restaurant margin and higher amortization of cloud computing arrangement costs.
Net Income
The increase in net income resulted primarily from a gain on early extinguishment of debt related to the repurchase of securitized debt in the fourth quarter of 2023 and an increase in operating profit.
Adjusted EBITDA
The increase in adjusted EBITDA resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, and lower general and administrative expense. These were partially offset by a decrease in U.S. Company-operated restaurant margin and higher franchise support and other costs primarily resulting from increased information technology and digital services provided to franchisees.
Adjusted Earnings Per Share
The decrease in adjusted earnings per share was driven by higher amortization of cloud computing arrangement costs and a higher tax rate. These were partially offset by an increase in adjusted EBITDA.
Full Year Financial Highlights
Total Revenues
The increase in revenues resulted primarily from higher sales at Company-operated restaurants, an increase in franchise royalty revenue, and an increase in advertising funds revenue. These increases were primarily driven by higher same-restaurant sales.
U.S. Company-Operated Restaurant Margin
The increase in U.S. Company-operated restaurant margin was primarily the result of a higher average check. This increase was partially offset by higher labor costs, higher commodity costs, and customer count declines.
General and Administrative Expense
The decrease in general and administrative expense was primarily driven by a decrease in employee compensation and benefits, a decrease in stock compensation, and lower professional fees resulting primarily from the completion of the Company’s ERP implementation. These were partially offset by a higher incentive compensation accrual.
Operating Profit
The increase in operating profit resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, an increase in U.S. Company-operated restaurant margin, and lower general and administrative expense. These were partially offset by higher amortization of cloud computing arrangement costs and lower other operating income primarily due to lapping a gain from insurance recoveries in the prior year.
Net Income
The increase in net income resulted primarily from an increase in operating profit and higher other income primarily driven by an increase in interest income. These increases were partially offset by a decrease in investment income.
Adjusted EBITDA
The increase in adjusted EBITDA resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, and an increase in U.S. Company-operated restaurant margin. These were partially offset by lower other operating income primarily due to lapping a gain from insurance recoveries in the prior year.
Adjusted Earnings Per Share
The increase in adjusted earnings per share was driven by an increase in adjusted EBITDA and higher interest income. These increases were partially offset by a decrease in investment income and higher amortization of cloud computing arrangement costs.
Free Cash Flow
The increase in free cash flow resulted primarily from higher net income adjusted for non-cash expenses and a decrease in payments for incentive compensation.
Company Declares Quarterly Dividend
The Company announced today the declaration of its regular quarterly cash dividend of 25 cents per share. The dividend is payable on March 15, 2024, to shareholders of record as of March 1, 2024. The number of common shares outstanding as of February 8, 2024 was approximately 205.5 million.
Share Repurchases
The Company repurchased 2.4 million shares for $45.7 million in the fourth quarter of 2023. The Company has not repurchased any shares in the first quarter of 2024 as of the date of this release. As of February 15, approximately $310.0 million remains available under the Company’s existing share repurchase authorization that expires in February 2027.
Company Announces Investments to Drive Accelerated Global Growth
The Company announced today investments that are expected to accelerate global growth, deliver significant restaurant margin expansion, and drive long-term shareholder value. The Company plans to invest:
Approximately $55 million in incremental breakfast advertising in the U.S. and Canada split evenly over the next two years;
Approximately $15 million, primarily in 2024, to support digital growth through mobile app enhancements and a step change in personalized marketing capabilities;
Approximately $30 million to support a rollout of digital menu boards to all U.S. Company-operated restaurants by the end of 2025 and digital menu board enhancements for the global system over the next two years.
2024 Outlook
This release includes forward-looking projections for certain non-GAAP financial measures, including systemwide sales, adjusted EBITDA, adjusted earnings per share and free …