Wendy's Shares Jump 5% After Earnings Beat Expectations, Outlook Raised
Wendy's Co. shares jumped 5.1% in Wednesday premarket trading after the fast-food company's first-quarter earnings beat expectations and it raised its 2016 outlook. Wendy's reported net income of $25.4 million, or 9 cents per share, compared with $27.5 million, or 7 cents per share, for the same period last year. Adjusted earnings were 11 cents per share, exceeding the FactSet consensus of 6 cents per share. Revenue for the quarter fell to $378.8 million from $451.8 million, beating the FactSet consensus of $351 million. The decline was primarily the result of the company's owning 375 fewer restaurants. Same-store sales increased 3.6% in North America system. Wendy's raised its full-year 2016 earnings outlook to between 38 cents and 40 cents from between 35 cents and 37 cents. The company expects same-store sales to climb 3% in North America. Wendy's also provided an update on the investigation into unusual credit card activity at its restaurants, with preliminary findings showing that malware installed through a compromised third-party affected a point of sale system at fewer than 300 franchised restaurants starting in fall 2015. The company is currently rolling out another system called Aloha that was not impacted. About 50 franchise restaurants were found to have or suspected to have experienced unrelated cybersecurity issues. Wendy's shares are up 3.8% for the year so far while the S&P 500 is up 2% for the same period.
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