Tuesday December 11, 2018, 00:00:00
By Mark Kalinowski
Our data-driven checks regarding Wendy’s (WEN; Neutral) suggest softness during November. As such, we lower our Q4E same-store sales for the Wendy’s North America system by 70 basis points to a new sell-side low (according to Consensus Metrix data) of 0.0%. Our checks for November 2018 were the worst for any month in our process since those we did for February 2012. While our 70 basis-point reduction in our Q4E same-store sales forecast is not enough to budge our $0.15 EPS estimate for Q4E, upside potential on both the same-store sales front and the EPS front in the near term may be limited. And, depending on how December goes, there may be some downside risk. We reiterate our Neutral rating on WEN, and note the following:
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Wednesday November 7, 2018, 00:00:00
By Mark Kalinowski
Please note that this report is best read in conjunction with the report we published yesterday, “WEN (Pre-Call): Q3 Same-Store Sales a Little Frosty.” (One correction we’d like to make about that report: our Q3E same-store sales forecast for Wendy’s was actually +1.0%, not +1.5% — we had actually lowered our forecast to +1.0% in our October 4th report “WEN: Our Data-Driven Checks Regarding September Sales Suggest…” Note that this does not change the Kalinowski Forecast track record over Q2 2011-Q3 2018 of being within 100 basis points of the same-store sales number Wendy’s reports 70.0% of the time, and being within 200 basis points of the samestore sales number Wendy’s reports 96.7% of the time.)
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Tuesday November 6, 2018, 00:00:00
By Mark Kalinowski
After today’s market close, Wendy’s (WEN; Neutral) reported adjusted Q3 EPS of $0.17, above our $0.15 forecast and the sell-side consensus (as measured by Consensus Metrix) of $0.15. We attribute the EPS beat to a lower-than-expected adjusted tax rate (15.0% vs. our 24.0% forecast and consensus of 23.7%).
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