Earnings Preview: Wendy's

| About: The Wendy's (WEN)

The Wendy's Company (WEN) is scheduled to report its Q2 2012 results on August 9, 2012, before market opens. The street expects EPS and revenue of $0.05 and $646.65M, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from WEN and the news from its closest competitors.

The Wendy

Recent EPS Actuals vs. Estimates

In the last quarter it reported $0.01 EPS, failing to meet analyst estimates of $0.03.

The Wendy

The consensus EPS estimate is $0.05 based on 18 analysts' estimates, same as $0.05 a year ago. Revenue estimates are $646.65M, up from $622.46M a year ago. The median target price by analysts for the stock is $5.00.

Average recommendation: Hold

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On July 12, 2012, KeyBanc Capital Mkts initiated Hold rating for the company.
  • On July 11, 2012, Wedbush Morgan Securities upgraded the company from Hold to Strong Buy.

Latest News

  • On June 28, 2012, The Wendy's Company announced that it is reaffirming its fiscal 2012 outlook for adjusted EBITDA from continuing operations in a range of $320-$335 million.
  • On May 8, 2012, The Wendy's Company announced that based on these results, the Company has revised fiscal 2012 outlook for Adjusted EBITDA from continuing operations to a range of $320 million to $335 million.
  • On April 5, 2012, The Wendy's Company announced an agreement with The Wissol Group to develop 25 restaurants in Georgia and the Republic of Azerbaijan over the next 10 years.
  • On March 1, 2012, The Wendy's Company reaffirmed its outlook for fiscal 2012, including adjusted EBITDA of $335 million to $345 million, which it originally issued at its January 30, 2012, Investor Day. In fiscal 2013 and beyond, the Company is targeting an average annual Adjusted EBITDA growth rate in the high-single-digit to low-double-digit range.
  • On February 13, 2012, The Wendy's Company announced the declaration of its regular quarterly cash dividend of $0.02 per share, payable on March 15, 2012 to stockholders of record as of March 1, 2012.


Chipotle Mexican Grill (CMG), Domino's Pizza (DPZ), McDonald's (MCD), and Yum! Brands (YUM) are considered competitors for Wendy's and the table below provides the key metrics for these companies and the industry.

The Wendy

The chart below compares the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

WEN Chart
(Click to enlarge)

WEN data by YCharts

Competitors' Latest Development

  • On July 18, 2012, Yum! Brands Inc reaffirmed its fiscal 2012 EPS guidance of at least 12% growth, excluding special items. The Company reported EPS of $2.87 for fiscal 2011.
  • On May 24, 2012, McDonald's Corp announced that it has declared a quarterly cash dividend of $0.70 per share of common stock, payable on June 15, 2012, to shareholders of record at the close of business on June 4, 2012.
  • On May 7, 2012, Rompres reported that five new United States companies will be listed on the Alternative Trading System of the Bucharest Stock Exchange International Department, starting on May 10, 2012.
  • On May 1, 2012, Yum! Brands Inc announced the promotion of Rick Carucci,, to President of the Corporation, reporting to Chairman and Chief Executive Officer, David C. Novak.
  • On April 20, 2012, McDonald's Corporation announced that it is continuing into April 2012 with global comparable sales growth expected to be about 4%.
  • On April 19, 2012, Chipotle Mexican Grill Inc. announced that for fiscal 2012, it expects mid single digit comparable restaurant sales growth.
  • On March 23, 2012, Yum! Brands Inc announced that the Board of Directors have declared a dividend of $0.285 per share of common stock. The quarterly dividend will be distributed May 4, 2012, to shareholders of record at the close of business on April 13, 2012.
  • On March 22, 2012, McDonald's Corporation announced that Vice Chairman and Chief Executive Officer (CEO) Jim Skinner has informed the Board of Directors of his decision to retire after 41 years with the Company, effective June 30, 2012.
  • On February 7, 2012, Yum! Brands Inc announced that, the Company is well-positioned to meet or exceed its annual target of at least 10% earnings per share (EPS) growth in fiscal 2012 and beyond.

Technical Overview

The stock has a market capitalization of $1.75B and is currently trading at $4.51 with a 52 week range of $4.29 - $5.58. The stock's year-to-date performance has been -15.60%. It is currently trading below 20, 50 and 200 SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Tagged: , Restaurants, Earnings
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