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Last Update: 16-Jan-13 08:15 ET
Wendy's shares higher by 5% following beat on earnings
Wendy's (WEN $5.19 +0.20) reported fourth quarter earnings of $0.08 per share, $0.04 better than the Capital IQ consensus of $0.04, while revenues rose 2.4% year/year to $629.9 million versus the $639.66 million consensus. Wendy's North America co-operated restaurant same-store sales decreased 0.2% during Q4, compared to a 5.1% increase a year ago. Franchise same-store sales in North America decreased 0.6% during the quarter. Co-operated restaurant margin was 15.9%, compared to 15.0% in 4Q11, primarily due to higher sales, including Image Activation, and a reduction in breakfast advertising expense, partially offset by commodity cost increases. The co did not repurchase any shares during Q4. Co issues upside guidance for FY13, sees EPS of $0.18-0.20 vs. $0.17 Capital IQ Consensus Estimate. Co reiterates its preliminary outlook for Adjusted EBITDA of $350-360 mln. Same-store sales growth of 2.0 to 3.0% at Wendy's North America Company-operated restaurants. New restaurant development of approxmately 25 new co restaurants and 40 new franchise restaurants, plus ~60 new international franchise and joint-venture restaurants. Five to 10 co-operated restaurant closures and approxmately 90 to 100 franchise restaurant closures in North America, plus approxmately 15 to 20 international restaurant closures. The reimaging of 100 co-operated restaurants and 100 franchised restaurants. The outlook includes the cost of a $10 million incentive program for franchisees to reimage their restaurants in 2013. Wendy's co-operated restaurant margin of 14.2 to 14.5%, compared to 14.0% in 2012. This estimate assumes the benefit of same-store sales increases, Image Activation sales, discontinuation of breakfast at certain restaurants and cost-savings initiatives. It also assumes a 90 to 120 basis-point impact from higher commodity costs, driven primarily by rising beef and chicken costs.
