Wendy's Earnings Preview

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Investors braced for a bumpy ride ahead of Wendy's (NYS: WEN) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Wednesday, Nov. 9. Wendy's Arby's Group is a quick-service restaurant company that is comprised of the Wendy's and Arby's brands.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Wendy's, with 10 out of 17 analysts rating it hold. Analysts like Wendy's better than competitor Jack in the Box overall. Five out of 14 analysts rate Jack in the Box a buy compared to seven out of 17 for Wendy's. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $619.3 million in revenue this quarter. That would represent a decline of 28.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.04 per share. Estimates range from $0.03 to $0.05.

What our community says:
CAPS All-Stars are solidly behind the stock, with 77.6% awarding it an outperform rating. The community at large backs the All-Stars, with 78.7% granting it a rating of outperform. Fools are bullish on Wendy's and haven't been shy with their opinions lately, logging 348 posts in the past 30 days. Despite the majority sentiment in favor of Wendy's, the stock has a middling CAPS rating of three out of five stars.

Management:

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

25.3%

22.2%

23.5%

22.5%

Operating Margin

7.6%

3.6%

1.6%

2.4%

Net Margin

1.8%

(0.2%)

(1.3%)

(0.1%)

For all our Wendy's-specific analysis, including earnings and beyond, add Wendy's to My Watchlist.

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At the time this article was published

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