Wendy's +3% After Q1 Results On Solid Growth In US Breakfast Sales Despite Labor Cost Issues

Wendy’s Company WEN shares are trading higher on Thursday after reporting first-quarter results.

The company reported first quarter adjusted earnings per share of 23 cents, beating the street view of 21 cents. 

Quarterly sales of $534.753 million missed the street view of $540.972 million.

Sales increased 1.1% year over year from increased advertising funds revenue and franchise royalty revenue, both driven by net new restaurant development and higher same-restaurant sales.

“We delivered global same-restaurant sales growth, which accelerated by 120 basis points on a two-year basis versus the previous quarter. This was driven in part by high-single digit year-over-year U.S. breakfast sales growth and global digital sales mix of nearly 17%,” President and Chief Executive Officer Kirk Tanner said.

U.S. Company-Operated Restaurant Margin expanded to 15.3% from 14.7% year over year owing to a higher average check, the company said. These were partially offset by customer count declines and higher labor costs.

Dividend: The company announced today the declaration of its regular quarterly cash dividend of 25 cents per share. The dividend is payable on June 17 to shareholders of record as of June 3.

Outlook: Wendy’s continues to expect global systemwide sales growth of 5% to 6%. 

The company expects FY24 adjusted EBITDA of $535 million to $545 million. Adjusted earnings per share is expected in the band of $0.98 to $1.02 versus $0.99 estimate.

Price Action: WEN shares are trading higher by 3.36% to $20.28 at last check Thursday. 

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