The 10-second takeaway
For the quarter ended June 30 (Q2), Wendy's met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share increased significantly. GAAP earnings per share increased.
Margins expanded across the board.
Wendy's recorded revenue of $650.5 million. The 17 analysts polled by S&P Capital IQ anticipated revenue of $658.5 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.08. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.06 per share. Non-GAAP EPS of $0.08 for Q2 were 60% higher than the prior-year quarter's $0.05 per share. GAAP EPS were $0.03 for Q2 against -$0.01 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 27.2%, 200 basis points better than the prior-year quarter. Operating margin was 9.7%, 170 basis points better than the prior-year quarter. Net margin was 1.9%, 280 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $650.1 million. On the bottom line, the average EPS estimate is $0.05.
Next year's average estimate for revenue is $2.57 billion. The average EPS estimate is $0.20.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 599 members out of 742 rating the stock outperform, and 143 members rating it underperform. Among 177 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 147 give Wendy's a green thumbs-up, and 30 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 $5.74.
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