The Wendy’s Co Releases Unaudited Q4 Results; Announces Buyback; Gives 2014 Guidance (WEN)

Before the opening bell on Monday, fast food chain Wendy’s (WEN) released its preliminary Q4 earnings. The company also announced that its board has approved a $275 million stock repurchase. The company is releasing its official results on February 27.

WEN Preliminary Unaudited Earnings

In North America, Wendy’s saw a 3.1% increase in same restaurant sales, which is up from a 0.2 percent decrease in last year’s Q4. Consolidated quarterly earnings fell despite the company’s improving restaurant sales, due to Wendy’s having less company operated restaurants. The earnings came in at $592.2 million, down from $629.9 million in last year’s same quarter. The company’s operating profit was also down, coming in at $24.1 million compared to $32.3 million in last year’s Q4. WEN adjusted earnings per share were between 10 cents and 11 cents (the company does not have a hard number due to the company not completed its tax closing procedures). For the full year, Wendy’s revenues came in at $2.487 billion, down from $2.505 billion last year. Operating profit for the full year was up to $130.3 million from $122.7 million last year.

CEO Commentary

Wendy’s president and CEO, Emil Brolick, had the following comments about the company’s earnings release: ”Wendy’s® made tremendous strategic and financial progress in 2013. We gained significant traction with consumers through ‘A Cut Above’ brand positioning, accelerated Wendy’s brand transformation with Image Activation and refined our Company-operated restaurant portfolio through System Optimization. These efforts contributed to improving metrics and solid financial performance, highlighted by 2013 North America Company-operated same-restaurant sales growth of 1.9 percent, record average annual sales of $1.51 million at North America Company-operated restaurants, and overall Adjusted EBITDA and Adjusted Earnings Per Share performance well ahead of original expectations.”

2014 Outlook

Looking forward to the coming year, WEN has announced that it expects adjusted EBITDA in the range of $390 million to $400 million. Adjusted EPS is expected in the range of 34 cents to 36 cents. The company sees same restaurant sales growth in the range of 2.5% to 3.5%.

Share BuyBack and Wendy’s Dividend

Wendy’s announced a $275 million share repurchase program. The program authorizes the buy back of up to $275 million worth of shares throughout 2014. Wendy’s most recently announced a dividend raise in May 2013 for its September payout. The company raised its dividend 25%, from 4 cents to 5 cents per quarter.

Stock Performance

Wendy’s stock was essentially flat in pre-market trading. So far this year, the company’s shares are down 2.87%.