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 international performance, especially in Canada and Latin America.

• Digital sales surged nearly 40% year-over-year, now representing over 17% of total sales, supported by app enhancements and a growing rewards program.

• Breakfast and late-night dayparts outperformed, with breakfast sales up mid-single digits and late-night up high single digits year-over-year.

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

• Menu innovation, such as the Krabby Patty Burger and Pineapple Under the Sea Frosty, drove significant sales and media attention.

Financial highlights

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

• US company restaurant margin was 15.6%, flat year-over-year, as higher average check and labor efficiencies were offset by labor inflation and lower customer counts.

• Adjusted EPS was $0.25 in Q3 2024, down from $0.27–$0.28 in Q3 2023.

• Free cash flow increased, driven by lower capital expenditures and reduced cloud computing costs, reaching $234.1M for the first nine months of 2024.

• G&A expenses rose 5.9% to $62.8M compared to Q3 2023.

Outlook and guidance

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

• Adjusted EBITDA outlook remains at $535–$545M.

• Adjusted EPS guidance narrowed to $0.99–$1.01 for 2024.

• Capital expenditures projected at $90–$100M; free cash flow at $275–$285M.

• Net unit growth to accelerate to 3–4% in 2025, with 70% of new development internationally.