The most recent earnings report from Wendy's (WEN -0.93%) barely elicited a reaction from investors: Shares of the quick-service restaurant enterprise closed virtually unchanged on Wednesday, following the company's pre-market issuance of third-quarter 2019 numbers. 

It's a testament to the company's results so far this year that shareholders viewed as routine a solid scorecard and a positive full-year earnings revision. Let's walk through the quarter's details, keeping in mind that all comparative numbers refer to those of the prior-year quarter.

A look at headline numbers 

Metric Q3 2019 Q3 2018 Change 
Revenue $437.9 million $400.5 million 9.3%
Net income  $46.1 million $391.2 million (88.2%)
Diluted earnings per share $0.20 $1.60 (88%)

Data source: Wendy's. 

Essential details from the quarter

The exterior of a renovated Wendy's restaurant.

Image source: Wendy's.

  • Systemwide sales grew by 5.5% in North America and 9.7% internationally, resulting in total global expansion of 5.7%.
  • North American same-store sales increased by 4.4%, although it should be noted that they had a bit of an easy comparison, as comps slipped by 0.2% in the third quarter of 2018.
  • Company-operated restaurant margin (i.e., sales from company-operated restaurants less direct restaurant expenses, divided by sales from company-operated restaurants) improved by 50 basis points to 16.2%.
  • Operating profit expanded by $1.7 million, to $79 million. 
  • The organization opened 27 new restaurants in North America and 13 new stores internationally. Net of closures, Wendy's launched 24 restaurants globally during the quarter.
  • Each restaurant renovation and new restaurant opening is counted in an "Image Activation" metric, which measures the global brand concept refresh rate. At the end of the quarter, approximately 56% of the company's global system was "image-activated," versus 50% at the end of Q3 2018.
  • In the third quarter of 2018, Wendy's sold its 12.3% stake in Inspire Brands back to the restaurant holding company, resulting in $450 million in income. This item is responsible for the net earnings disparity between periods as seen in the table. 
  • Wendy's repurchased $26.4 million of its common stock during the quarter. It also relayed to investors that it's repurchased $9.2 million worth of shares during the fourth quarter, which is part of a $100 million accelerated repurchase program announced last month. Including this latest transaction, Wendy's has bought back roughly $86 million of its shares so far in 2019.

Firming up 2019 and looking ahead to 2020

As I recently discussed, the company relayed new growth goals in its investor day conference in October that rely on international expansion in Europe and the introduction of breakfast across its U.S. system. One of the chain's most significant ambitions is to move its present annual comps growth rate of 3%-4% to a long-term rate of 4%-5%.

As we head into the final quarter of the year, comparable sales are indeed accelerating. On Wednesday, Wendy's raised its full-year 2019 comps expansion target from an envelope of 3%-4% to an expected band of between 3.5% and 4%.

In another sign of momentum, the company shifted its full-year adjusted EBITDA growth rate from "flat to down 2%" to "flat to down 1%." Similarly, management's outlook for adjusted earnings per share has improved, from the former projected decline of 3.5% to 6.5% against 2018 to a more optimistic target of "up 1.5% to down 1.5%."

Management expects year-end comparable sales and top-line momentum to carry into the new year. On Wednesday, the company reaffirmed that it's "on track" to achieve its 2020 guidance figures, notably, global systemwide sales of $12.0 billion to $12.5 billion and adjusted EBITDA of between $425 million and $435 million. Investors have mirrored management's confidence as of late: Though shares finished flat after the earnings release, they've returned 35% year to date on a total return basis.