Wendy’s Co. (NASDAQ: WEN) published its financial results for the fiscal fourth quarter on Wednesday that fell shy of Wall Street estimates. The company attributed its dovish performance to the COVID-19 crisis that continues to weigh on the fast-food chains.
Wendy’s shares tanked 4% in premarket trading on Wednesday and lost another 2% on market open. Including the price action, the stock is now exchanging hands at £14.29 per share. In comparison, it had slid to a low of £5.35 per share in March 2020, when the Coronavirus pandemic was at its peak. Learn more about how to pick winning stocks.
Wendy’s Q4 financial results versus analysts’ estimates
Wendy’s said that its net income in the fourth quarter printed at £27.71 million, that translates to 12.17 pence per share. In the comparable quarter of last year, its net income had come in at a lower £18.97 million, or 7.88 pence per share.
The American holding company said that it generated £339.58 million of revenue in Q4 versus the year-ago figure of £305.86 million. In the prior quarter (Q3), Wendy’s posted £323.76 million of revenue.
According to FactSet, experts had forecast the company to report £341.52 million of revenue in the recent quarter. Their estimate for per-share earnings stood at a marginally higher 12.89 pence.
Same-restaurant sales, as per Wendy’s, saw a 4.7% year over year increase globally versus an even broader 5.7% growth expected. Domestic same-restaurant sales, on the other hand, jumped 5.5% in the fourth quarter, also lower than 6.1% expected.
Wendy’s forecasts an 8% global systemwide growth in 2021
The Dublin-based firm also said on Wednesday that its U.S. same-restaurant sales in 2021 (till 21st February) were up 6%. Its year-to-date global same-restaurant sales, it added, were also up 5%. For the full financial year, Wendy’s now forecasts up to an 8% global systemwide growth. Analysts, on the other hand, are calling for a much lower 3.4% increase.
Wendy’s earnings report comes a day after the eighth-largest U.S. retailer, Target Corp, said that its financial performance was better than what analysts had anticipated in the fiscal fourth quarter.
Wendy’s remained almost flat on average in the stock market last year with an annual decline of roughly 1%. At the time of writing, the Dublin-based fast-food chain has a market cap of £3.29 billion and a price to earnings ratio of 44.53.
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