Wendy's Hits Estimates in Solid Quarter

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Wendy's (NAS: WEN) reported earnings on Mar. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 1 (Q4), Wendy's met expectations on revenues and earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share expanded.

Margins improved across the board.

Revenue details
Wendy's logged revenue of $615.0 million. The 15 analysts polled by S&P Capital IQ looked for revenue of $613.1 million on the same basis. GAAP reported sales were 27% lower than the prior-year quarter's $840.7 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.04. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.04 per share on the same basis. GAAP EPS were $0.01 for Q4 versus -$0.03 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 26.1%, 260 basis points better than the prior-year quarter. Operating margin was 7.9%, 300 basis points better than the prior-year quarter. Net margin was 0.6%, 190 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $608.2 million. On the bottom line, the average EPS estimate is $0.02.

Next year's average estimate for revenue is $2.52 billion. The average EPS estimate is $0.17.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 541 members out of 678 rating the stock outperform, and 137 members rating it underperform. Among 158 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 124 give Wendy's a green thumbs-up, and 34 give it a red thumbs-down.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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