The 10-second takeaway
For the quarter ended April 1 (Q1), Wendy's missed estimates on revenues and missed on earnings per share.
Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share grew.
Gross margins dropped, operating margins dropped, and net margins expanded.
Wendy's chalked up revenue of $593.2 million. The 14 analysts polled by S&P Capital IQ looked for revenue of $608.4 million on the same basis. GAAP reported sales were 1.8% higher than the prior-year quarter's $582.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.00. The 17 earnings estimates compiled by S&P Capital IQ forecast $0.03 per share. GAAP EPS of $0.03 for Q1 were much higher than the prior-year quarter's $0.00 per share. (The prior-year quarter included $0.00 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 23.2%, 150 basis points worse than the prior-year quarter. Operating margin was 5.3%, 10 basis points worse than the prior-year quarter. Net margin was 2.1%, 230 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $647.3 million. On the bottom line, the average EPS estimate is $0.05.
Next year's average estimate for revenue is $2.53 billion. The average EPS estimate is $0.17.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 568 members out of 705 rating the stock outperform, and 137 members rating it underperform. Among 150 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 119 give Wendy's a green thumbs-up, and 31 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Wendy's is hold, with an average price target of $5.49.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.