Shares of Wendy’s Company (NASDAQ: WEN) experienced a decline in trading on Thursday following the release of the fourth-quarter FY24 results. The company reported a notable 6.2% year-on-year increase in fourth-quarter sales, amounting to $574.27 million, which surpassed the analyst consensus estimate of $563.637 million. This growth in revenues was primarily fueled by escalations in franchise fees, sales from Company-operated restaurants, revenue from advertising funds, and franchise royalty revenue. Adjusted revenues also saw a rise of 6.4% to reach $459.3 million.
Systemwide sales in the U.S. exhibited a 4.5% growth, while International sales soared by 11.3%. Moreover, global same-restaurant sales experienced a growth rate of 4.3%. The U.S. company-operated restaurant margin stood at 16.5%, marking an improvement from 13.5% over the previous year.
The operating income for the quarter saw a significant Y/Y increase of 10.9%, reaching $96 million. Adjusted EBITDA also exhibited a rise of 8.6% Y/Y to $137.5 million. The adjusted EPS of $0.25 outpaced the consensus estimate of $0.24.
As of the end of December, the company held $503.61 million in cash and equivalents. The operating cash flow for the year totaled $355.31 million, with a free cash flow of $278.95 million. As of February 6, around $228.1 million remains available under the existing share repurchase authorization that is set to expire in February 2027.
Wendy’s declared its regular quarterly cash dividend at $0.25 per share, to be paid on March 17, 2025, to shareholders of record as of March 3, 2025. The company announced a new target dividend payout ratio of 50% to 60% of adjusted earnings. Consequently, starting in the second quarter of 2025, a quarterly dividend of $0.14 per share is expected to be paid out.
Additionally, Wendy’s is planning to repurchase up to $200 million of its shares in 2025, with the majority of shares anticipated to be acquired in the coming months. President and CEO Kirk Tanner expressed excitement about the future prospects of the company in strengthening its global system. The new capital allocation policy aims to explore opportunities and enhance long-term shareholder value.
Looking ahead, Wendy’s foresees adjusted EPS for FY25 in the range of $0.98 to $1.02, as opposed to the consensus of $1.03. The company expects global systemwide sales growth for FY25 to be between 2.0% and 3.0%, and projects adjusted EBITDA for FY25 to fall within the range of $550 million to
