Wendy's (WEN) Q4 Earnings Beat, Revenues Miss Estimates
Zacks Investment Research | Feb 21, 2019 08:08PM ET
The Wendy's Company (NASDAQ:WEN) reported mixed preliminary results for the fourth quarter of 2018, wherein revenues missed estimates while earnings surpassed the same.
Adjusted earnings of 16 cents surpassed the Zacks Consensus Estimate of 15 cents by 6.7%. The bottom line also increased a whopping 77.8% year over year, primarily favored by the positive effect of lower tax rate from Tax Cuts and Jobs Act of 2017. Increase in adjusted EBITDA and fewer outstanding shares also boosted the reported quarter’s earnings.
Quarterly revenues of $397.8 million lagged the consensus mark of $400 million by 0.6%. However, the top line improved 3.6% from the year-ago quarter, driven by increased sales at the company-operated restaurants. Revenues also gained from an increase in franchise royalty revenues and fees, which were primarily driven by new restaurant development and lower franchise incentives.
Meanwhile, comps at the North America system restaurants were up 0.2% against a decline of 0.2% in the second quarter and compared with a 1.3% increase in the year-ago quarter.
Notably, the company’s shares have gained 5.3% over the past year, underperforming the Zacks Investment Research
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