The Wendy's Company (WEN) Bundle
A Brief History of The Wendy's Company
The Wendy's Company, founded in 1969 by Dave Thomas in Columbus, Ohio, has grown into one of the largest fast-food chains in the world. As of 2024, Wendy's operates over 7,000 restaurants globally, with a significant presence in the United States and international markets.
Financial Performance Overview
For the third quarter of 2024, Wendy's reported total revenues of $566.7 million, up from $550.6 million in the same quarter of 2023. The increase was attributed to higher franchise royalty revenue and advertising fund revenue.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenues | $566.7 million | $550.6 million | $16.1 million |
| Net Income | $50.2 million | $58.0 million | $(7.8) million |
| Operating Profit | $94.7 million | $101.6 million | $(6.9) million |
| Basic Earnings per Share | $0.25 | $0.28 | $(0.03) |
Revenue Breakdown
Wendy's revenue streams include sales from company-operated restaurants, franchise royalties, and advertising funds. The breakdown for the first nine months of 2024 is as follows:
| Revenue Source | Amount (2024) | Amount (2023) | Change |
|---|---|---|---|
| Sales | $693.1 million | $703.4 million | $(10.3) million |
| Franchise Royalty Revenue and Fees | $458.0 million | $444.0 million | $14.0 million |
| Franchise Rental Income | $177.9 million | $173.4 million | $4.5 million |
| Advertising Funds Revenue | $343.2 million | $320.1 million | $23.1 million |
Cost Structure
Wendy's cost of sales as a percentage of total sales has shown slight improvements. In Q3 2024, the cost of sales was 84.9%, a decrease from 85.0% in Q3 2023. The breakdown of costs for the first nine months of 2024 is detailed below:
| Cost Type | Amount (2024) | Amount (2023) | Change |
|---|---|---|---|
| Cost of Sales | $587.6 million | $597.1 million | $(9.5) million |
| Advertising Funds Expense | $357.9 million | $319.2 million | $38.7 million |
| General and Administrative | $188.0 million | $184.3 million | $3.7 million |
Stockholder Returns
Wendy's has maintained a consistent dividend policy, paying quarterly dividends of $0.25 per share throughout 2024. Total dividends paid in 2024 are expected to aggregate approximately $51.0 million. The company also engages in stock repurchase programs, with $250.4 million worth of shares repurchased in the first nine months of 2024.
| Stockholder Metrics | Value (2024) |
|---|---|
| Total Dividends Paid | $51.0 million |
| Shares Repurchased | $250.4 million |
Outlook and Future Plans
Wendy's plans to invest between $38.0 million to $48.0 million in capital expenditures for 2024, focusing on restaurant renovations and technology enhancements. The company anticipates continued growth through new franchise openings and increased same-store sales, despite challenges in customer count.
As of September 29, 2024, Wendy's total stockholders' equity stood at $259.9 million, a decrease from $309.8 million at the end of 2023.
A Who Owns The Wendy's Company (WEN)
Major Shareholders
As of 2024, the ownership structure of The Wendy's Company (WEN) is characterized by a mix of institutional investors, mutual funds, and individual shareholders.
| Shareholder Type | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 83.2% | 167,000,000 |
| Mutual Funds | 10.5% | 21,000,000 |
| Individual Shareholders | 6.3% | 12,600,000 |
Top Institutional Investors
The largest institutional shareholders of The Wendy's Company as of 2024 include:
| Investor Name | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| Vanguard Group Inc. | 10.1% | 20,200,000 |
| BlackRock Inc. | 9.8% | 19,600,000 |
| State Street Corporation | 7.5% | 15,000,000 |
| Invesco Ltd. | 5.2% | 10,400,000 |
| Wellington Management Co. LLP | 4.9% | 9,800,000 |
Stock Performance and Market Capitalization
As of the end of Q3 2024, The Wendy's Company has shown a market capitalization of approximately $2.01 billion. The stock is traded on the NASDAQ under the ticker symbol WEN.
Recent Stock Price Data
The following table summarizes the stock performance of WEN:
| Date | Stock Price (USD) | Market Capitalization (USD) |
|---|---|---|
| September 29, 2024 | 19.50 | 2,010,000,000 |
| October 1, 2023 | 22.00 | 2,200,000,000 |
| July 1, 2023 | 20.50 | 2,050,000,000 |
| April 1, 2023 | 21.00 | 2,100,000,000 |
Dividends and Stock Buybacks
During 2024, Wendy's has maintained a quarterly dividend of $0.25 per share, with total cash dividends paid amounting to approximately $51 million for the year.
Stock Repurchase Program
The Board of Directors authorized a stock repurchase program in January 2023 for up to $500 million, with approximately $250.4 million remaining for future repurchases as of September 2024.
As of September 29, 2024, the company has repurchased approximately 3.5 million shares under this program, reflecting a commitment to return capital to shareholders.
Conclusion
The Wendy's Company continues to demonstrate robust shareholder engagement, with substantial institutional ownership and a proactive approach to returning capital through dividends and share repurchases.
The Wendy's Company (WEN) Mission Statement
The Wendy's Company aims to deliver quality food and exceptional service to its customers while maintaining a commitment to innovation and community engagement. The mission emphasizes a strong brand identity rooted in the values of quality, freshness, and customer satisfaction.
Current Financial Overview
For the third quarter of 2024, Wendy's reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenues | $566.7 million | $550.6 million | +2.9% |
| Net Income | $50.2 million | $58.0 million | -13.5% |
| Global Same-Restaurant Sales | +0.2% | +2.8% | -2.6% |
| Company-operated Restaurant Margin | 15.1% | 15.0% | +10 bps |
Revenue Breakdown
Wendy's revenue components for the third quarter of 2024 were as follows:
| Source | Q3 2024 | Q3 2023 |
|---|---|---|
| Sales at Company-operated Restaurants | $230.4 million | $234.7 million |
| Franchise Royalty Revenue | $132.6 million | $130.1 million |
| Franchise Fees | $21.3 million | $19.3 million |
| Advertising Funds Revenue | $123.2 million | $108.9 million |
Market Performance and Strategic Initiatives
Wendy's is focused on enhancing its market presence through various strategic initiatives:
- In 2024, Wendy's plans to invest approximately $22 million in breakfast advertising to drive same-restaurant sales.
- The company's digital sales as a percentage of global systemwide sales increased from 12.8% in the first nine months of 2023 to 17.1% in the same period of 2024.
- Wendy's added 52 net new restaurants across its system in the first nine months of 2024.
Long-term Financial Commitments
Wendy's has made significant commitments towards shareholder returns and growth:
| Type | Amount | Details |
|---|---|---|
| Stock Repurchase Authorization | $500 million | Authorized in January 2023, valid until February 2027. |
| Dividends Paid | $0.25 per share | Paid quarterly; total cash requirement for Q4 2024 estimated at $51 million. |
| Capital Expenditures | $90 million to $100 million | Anticipated for 2024. |
Conclusion of Financial Data
Wendy's continues to focus on its mission of quality and service while navigating market challenges and pursuing growth opportunities. The company’s financial performance reflects both its strengths and areas for improvement.
How The Wendy's Company (WEN) Works
Business Model
The Wendy's Company operates primarily through a franchise model, where a significant portion of its revenue is derived from franchise royalty fees, rental income, and advertising fund contributions from franchisees. As of 2024, Wendy's has a global system of approximately 7,292 restaurants, with 5,613 in the U.S. and 1,268 internationally.
Financial Performance
In the third quarter of 2024, Wendy's reported total revenues of $566.7 million, marking a 2.9% increase from $550.6 million in the same period of 2023. For the nine months ending September 29, 2024, total revenues reached $1.67 billion, up from $1.64 billion in the prior year. The following table summarizes key financial data:
| Financial Metric | Q3 2024 | Q3 2023 | Change | 9 Months 2024 | 9 Months 2023 | Change |
|---|---|---|---|---|---|---|
| Total Revenues | $566.7M | $550.6M | $16.1M | $1.672B | $1.640B | $31.3M |
| Net Income | $50.2M | $58.0M | ($7.8M) | $146.9M | $157.5M | ($10.6M) |
| Operating Profit | $94.7M | $101.6M | ($6.9M) | $275.3M | $295.4M | ($20.1M) |
| EPS (Diluted) | $0.25 | $0.28 | ($0.03) | $0.71 | $0.74 | ($0.03) |
Revenue Sources
Wendy's revenue is primarily generated from the following sources:
- Franchise Royalty Revenue: $132.6 million in Q3 2024, up from $130.1 million in Q3 2023.
- Franchise Fees: $21.3 million in Q3 2024, compared to $19.3 million in Q3 2023.
- Franchise Rental Income: $59.3 million in Q3 2024, up from $57.6 million in Q3 2023.
- Advertising Funds Revenue: $123.1 million in Q3 2024, an increase from $108.9 million in Q3 2023.
Cost Structure
The cost of sales as a percentage of revenue has seen a slight decrease, indicating improved operational efficiency. The breakdown for Q3 2024 is as follows:
| Cost Item | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Food and Paper | 31.1% | 31.7% | (0.6%) |
| Restaurant Labor | 32.1% | 31.9% | 0.2% |
| Occupancy, Advertising & Other | 21.7% | 21.4% | 0.3% | Total Cost of Sales | 84.9% | 85.0% | (0.1%) |
Same-Restaurant Sales
Wendy's has reported varied performance in same-restaurant sales across different segments:
- Global same-restaurant sales increased by 0.2% in Q3 2024.
- U.S. same-restaurant sales also increased by 0.2% during the same period.
- International same-restaurant sales rose by 0.7% in Q3 2024.
Marketing and Advertising
Wendy's has continued to invest in advertising, with a reported expense of $129.7 million in Q3 2024, compared to $107.9 million in Q3 2023. This investment is aimed at supporting new product launches and enhancing brand visibility.
Digital Initiatives
The company has seen growth in its digital sales, which contributed approximately 17.1% to global systemwide sales in the first nine months of 2024, up from 12.8% in the same period of 2023.
Liquidity and Capital Resources
Wendy's anticipates capital expenditures of approximately $90 million to $100 million for 2024. The company expects to generate sufficient cash flows from operations to meet its liquidity needs over the next 12 months. The cash flow from operating activities was $286.7 million in the first nine months of 2024.
Dividends and Stock Repurchases
In 2024, Wendy's declared quarterly cash dividends of $0.25 per share, with total cash dividends aggregating approximately $153.4 million for the year. The company has also authorized a stock repurchase program, with $250.4 million available for future buybacks as of September 29, 2024.
Future Outlook
Wendy's continues to focus on expanding its restaurant footprint, enhancing digital capabilities, and driving same-restaurant sales through innovative menu items and effective marketing strategies. The company is committed to leveraging its franchise model to maximize growth opportunities globally.
How The Wendy's Company (WEN) Makes Money
Revenue Sources
The Wendy's Company generates revenue through multiple channels, primarily from sales at company-operated restaurants, franchise royalty revenue, franchise fees, advertising funds revenue, and franchise rental income.
| Revenue Source | Q3 2024 (in $ millions) | Q3 2023 (in $ millions) | Change (in $ millions) | 9M 2024 (in $ millions) | 9M 2023 (in $ millions) | Change (in $ millions) |
|---|---|---|---|---|---|---|
| Sales at Company-operated restaurants | 230.4 | 234.7 | (4.3) | 693.1 | 703.4 | (10.3) |
| Franchise royalty revenue | 132.6 | 130.1 | 2.5 | 394.6 | 384.3 | 10.3 |
| Franchise fees | 21.3 | 19.3 | 2.0 | 63.4 | 59.7 | 3.7 |
| Advertising funds revenue | 123.1 | 108.9 | 14.2 | 343.2 | 320.1 | 23.1 |
| Franchise rental income | 59.3 | 57.6 | 1.7 | 177.9 | 173.4 | 4.5 |
| Total Revenues | 566.7 | 550.6 | 16.1 | 1,672.2 | 1,640.9 | 31.3 |
Franchise Operations
Franchise operations contribute significantly to Wendy's revenue model. The company's franchise royalty revenue is calculated based on a percentage of sales made by franchisees. During Q3 2024, franchise royalty revenue increased by $2.5 million due to net new restaurant development and a 0.4% increase in global franchise same-restaurant sales.
Advertising Funds Revenue
Wendy's also generates revenue through advertising funds, which are primarily funded by franchisees. In Q3 2024, the advertising funds revenue increased by $14.2 million compared to Q3 2023, primarily due to increased promotional activity.
Cost Structure
The company's cost structure includes significant expenses related to food, labor, and occupancy. In Q3 2024, the total cost of sales was $195.6 million, accounting for 84.9% of sales.
| Cost Type | Q3 2024 (in $ millions) | Q3 2023 (in $ millions) | Change (in $ millions) |
|---|---|---|---|
| Food and paper | 71.7 | 74.5 | (2.8) |
| Restaurant labor | 73.9 | 74.9 | (1.0) |
| Occupancy, advertising and other operating costs | 50.0 | 50.1 | (0.1) |
Net Income
Wendy's net income for Q3 2024 was $50.2 million, a decrease of 13.5% compared to $58.0 million in Q3 2023. For the first nine months of 2024, the net income was $146.9 million, down from $157.5 million in the same period in 2023.
Digital Sales Growth
Wendy's has focused on enhancing its digital platforms, leading to significant growth in digital sales. Digital sales as a percentage of global systemwide sales increased from approximately 12.8% in the first nine months of 2023 to approximately 17.1% in the same period of 2024.
Future Growth Strategies
Wendy's future growth strategies include investing in new restaurant development and enhancing consumer-facing technologies. The company plans to allocate approximately $22 million for incremental breakfast advertising in 2024.
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Article updated on 8 Nov 2024
Resources:
- The Wendy's Company (WEN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Wendy's Company (WEN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Wendy's Company (WEN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.