Wendy's Earnings Beat Expectations, Lifts Dividend
Wendy's Co. shares were indicated up 0.2% in Wednesday premarket trading after the fast-food company reported third-quarter earnings that beat expectations. Net income was $48.9 million, or 18 cents per share, up from $7.6 million, or 3 cents per share, for the same period last year. Adjusted earnings per share were 11 cents, beating the 10-cent FactSet consensus. Revenue was $364.0 million, down from $464.6 million, but ahead of the $351 million FactSet consensus. Same-restaurant sales across the North American system were up 1.4%. The company has 433 fewer company-operated restaurants compared to last year, said Chief Executive Todd Penegor in a statement, and it's on track to reduce company-operated ownership to about 5% of the total system by the end of 2016. Wendy's plans to sell about 315 restaurants to franchisees by the end of 2016, the company said. As part of a previously authorized $1.4 billion share buyback program, the company intends to accelerate the repurchase of $150 million of its common stock. The board has approved an increase of 0.5 cents per share of its quarterly dividend rate. The new rate of 6.5 cents will be effective with the next dividend payment on Dec. 15, 2016 to shareholders of record as of Dec. 1. Wendy's is increasing its 2016 outlook to adjusted EPS of 40 cents to 41 cents from 39 cents to 40 cents. It now expects same-restaurant sales growth of about 1.5% for the North American system. Wendy's shares are up 3.3% for the year so far while the S&P 500 Index is up 4.7% for the same period.
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