By Dean Seal
Wendy's reported higher revenue in the fourth quarter as customer traffic and average spending rose, boosting restaurant margins.
The fast-food chain posted a profit of $47.5 million, or 23 cents a share, compared with $46.9 million, or 23 cents a share, in the same quarter a year ago.
Stripping out one-time items, adjusted earnings were 25 cents a share. Analysts polled by FactSet had been expecting 24 cents a share.
Revenue rose 6.2% to $574.3 million, above analyst forecasts for $562.6 million, according to FactSet.
Same-restaurant sales were up 4.3% during the quarter. Analysts had been expecting a 3.2% gain. The top line also saw a boost from higher franchise fees, advertising funds revenue and franchise royalty revenue.
Restaurant margin meanwhile got a boost from higher spending per trip, more customers and labor efficiencies. Overhead costs rose from higher employee compensation and benefits.
Better margin and higher non-sales revenue contributed to the bottom line growth, which was partially offset by the company's investments in breakfast advertising and impairments from the closing of certain restaurants.
For the year ahead, systemwide sales are expected to rise 2% to 3%. Adjusted earnings are expected to come in at 98 cents to $1.02 a share, shy of current analyst forecasts for $1.04 a share, according to FactSet.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
February 13, 2025 07:39 ET (12:39 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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