Strong sales in North America powered a surprisingly strong second quarter and Wendy's, which generated some interest from investors before the opening bell Wednesday.
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Shares rose 2 percent in premarket trading, with signs that a company campaign to rely more on franchising is paying off.
That shift, because there are fewer company-run stores, pushed revenue down to $320.3 million, from $382.7 million. But that is something that industry analysts had anticipated, and the final revenue number was much better than the $298.7 million that Wall Street had was looking for, according to a survey by Zacks Investment Research.
Falling overall revenue was somewhat offset by rising royalty revenue and fees from franchisees, which rose almost 27 percent during the quarter. Income from franchise rentals also jumped.
Sales at restaurants in North America open at least a year increased 3.2 percent, the 18th straight quarter of growth.
For the period ended July 2, Wendy's Co. lost $1.8 million, or a penny per share. A year earlier the Dublin, Ohio, company earned $26.5 million, or 10 cents per share.
Removing one-time costs, earnings were 15 cents per share. Analysts were calling for 13 cents per share, according to Zacks.
Wendy's still expects full-year adjusted earnings of between 45 and 47 cents per share. Analysts polled by FactSet predict earnings of 46 cents per share.
Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on WEN at https://www.zacks.com/ap/WEN
Keywords: Wendy's, Earnings Report