The Wendy’s Company (WEN) Q3 2024 earnings summary

Executive summary

• Global systemwide sales grew 1.8% in Q3 2024, with same-restaurant sales up 0.2% and strong digital expansion, now over 17% of global sales.

• US traffic and dollar share were maintained despite a challenging QSR burger category, with momentum in breakfast and late-night sales.

• Digital sales surged nearly 40% year-over-year, supported by app enhancements and loyalty growth.

• Strategic closures of underperforming restaurants are offset by new openings, keeping net unit growth flat for 2024 and setting up for 3–4% net unit growth in 2025.

• Menu innovation, impactful marketing, and operational excellence are key drivers for future growth.

Financial highlights

• Adjusted EBITDA decreased 2.9% to $135.2M in Q3 2024, mainly due to increased breakfast investment and higher G&A expenses.

• US company restaurant margin was 15.6%, flat year-over-year, as labor efficiencies offset inflation and customer count declines.

• Adjusted EPS declined to $0.25 due to lower EBITDA, higher depreciation, and tax rate, partially offset by share repurchases.

• Free cash flow increased, driven by lower capital expenditures and reduced cloud computing payments.

• Revenue rose 2.9% year-over-year to $566.7M in Q3 2024; net income fell 13.5% to $50.2M.

Outlook and guidance

• Full-year 2024 global systemwide sales growth expected at ~3%, with 1–2% same restaurant sales growth.

• Adjusted EBITDA guidance remains $535–545 million; adjusted EPS outlook narrowed to $0.99–1.01.

• US company-operated restaurant margin expected between 15–16%; capital expenditures forecasted at $90–100 million.

• Net unit growth to be flat in 2024, accelerating to 3–4% in 2025, with 70% of new development internationally.

• Free cash flow guidance for 2024 is $275–285 million.