Wendy’s Q1 reveals robust AUV, sales, growth

The Wendy’s Co. had one of its best quarters in history in Q1 2022 with global same-restaurant sales up double digits and increased its global digital sales mix to over 10%, according to an earnings release.

“We continue to make meaningful progress against our three strategic growth pillars, reinforcing the strength and resiliency of Wendy’s brand and driving robust AUV and sales increases,” President and CEO Todd Penegor said in the release.

The brand had over 90 restaurant openings and is on track to hit its planned net unity growth goal of 5% to 6% for the year.

“We are well positioned to win in this volatile environment, with a strong franchise alignment behind our strategies, and have strengthened our balance sheet with the successful debt raise transaction we recently completed. With sustained focus on executing against our key priorities, we are confident we will achieve our vision of becoming the world’s most thriving and beloved restaurant brand, “Penegor said in the release.

The company will host a virtual investor day event on June 9.

Its US systemwide sales growth was 2.4% and its international sales growth was 19.2%, according to the release.

The increase in revenues was primarily driven by higher sales at company-operated restaurants driven largely by the favorable impact of the acquisition of 93 franchise-operated restaurants in Florida during the fourth quarter of 2021. This was partially offset by the sale of 47 company- operated restaurants in the New York market during the second quarter of 2021, according to the release.

Revenues also benefited from an increase in franchise royalty revenue and advertising funds revenue, both of which increased largely due to higher same-restaurant sales.

The decrease in company-operated restaurant margin was primarily the result of higher commodity and labor costs, customer count declines and the impact of the company’s investments to support entry into the UK market, said the earnings release.

The decrease in adjusted EBITDA resulted primarily from higher general and administrative expense and a decrease in company-operated restaurant margin.

These decreases were partially offset by higher franchise royalty revenue.

This year the brand expects the following:

  • Adjusted EBITDA: $ 490 million to $ 505 million.
  • Adjusted earnings per share: $ 0.82 to $ 0.86.
  • Cash flows from operations: $ 305 million to $ 325 million.
  • Capital expenditures: $ 90 million to $ 100 million.
  • Free cash flow: $ 215 million to $ 225 million.

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