Wendys Q3 adjusted revenue misses estimates, hurt by weaker US demand

Overview

• U.S. fast-food chain's Q3 adjusted revenue missed analyst expectations

• Adjusted EPS for Q3 beat analyst expectations

• Global systemwide sales fell 5.9%, led by a 7.6% U.S. decline

Outlook

• Wendys is implementing Daves Way, a multi-year strategy to grow traffic and market share

• Company expects breakfast strategy changes could unlock up to $200 mln in EBITDA

• Company plans restaurant acquisitions and franchise transfers to strengthen franchisee economics

Result Drivers

• U.S. SALES DECLINE - Co said lower U.S. same-restaurant sales and fewer U.S. restaurants drove global sales decrease

• LOWER ROYALTY REVENUE - Co attributed revenue decline mainly to lower franchise royalty revenue, partly offset by higher advertising funds revenue and more company-operated restaurant sales

• MARGIN PRESSURE - Co said U.S. restaurant margin fell due to lower traffic, higher labor and commodity costs, partly offset by higher average check and labor efficiencies

Company press release: ID:nPn3g9QMWa

Key Details

Reuters Recommended Reads

• Nov 4 - McDonald's says US sales on the mend as promotions draw diners back

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• Nov 4 - Applebee's owner Dine Brands beats Q3 sales estimates on value, menu innovation

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)