WEN (Post-Call) Easier Same-Store Sales Comparisons to be Lapped in 2H

By Mark Kalinowski Published on August 7, 2019 at 12:00 AM

Earlier today, Wendy’s (WEN; Neutral) reported second-quarter adjusted EPS of $0.18 — one cent above our $0.17 forecast and sell-side consensus (according to Consensus Metrix) of $0.17. We would note that D&A/Revenues came in at 7.2% actual vs. our 7.7% estimate, accounting for the $0.01 difference between the actual and our model. Given the one-cent EPS beat, we raise our full-year 2019E EPS estimate by one cent, to $0.64. (FYI, our full-year 2020E EPS forecast stays at $0.78.)

WEN 2019 Franchise Disclosure Document Review for Wendys

By Mark Kalinowski Published on June 11, 2019 at 12:00 AM

Not too long ago, Wendy’s (WEN; Neutral) filed its 500+ page Franchise Disclosure Document (FDD) for 2019. In this report, we cite some of the highlights from that document following our review of it, including our review of it in comparison to last year’s Franchise Disclosure Document. For example, we note that the median U.S. company-owned restaurant generated $1,868,693 in revenue last year (versus $1,830,565 in 2017), and that the median U.S. franchised restaurant generated $1,548,551 in revenue last year (versus $1,541,069 in 2017). The best-performing restaurant in the Wendy’s U.S. system overall — generating $4,714,549 in 2018 sales — is in Chicago. Our report also contains data regarding the sales lifts provided by the company’s Image Activation initiative, broken down by type of design. For franchised restaurants that underwent a Refresh — the most frequently chosen Image Activation format — that was completed during 2018, the median gross sales lift cited in the FDD is +4.6%. We reiterate our Neutral rating on WEN and note the following:

YUM Some Potential Acquisition Candidates for Yum Brands

By Mark Kalinowski Published on June 10, 2019 at 12:00 AM

In April, Restaurant Business reported that “Yum [Brands], the parent company of Taco Bell, KFC and Pizza Hut, will ‘absolutely’ acquire another brand one day, [CEO Greg] Creed said. ‘In the future, other brands will want to become part of the Yum family,’ he said. ‘We’ll do it because these brands want to join us more than I want to pay some huge multiple.’”