Upcoming AWS Coverage on Texas Roadhouse Post-Earnings Results

LONDON, UK / ACCESSWIRE / June 1, 2017 / Active Wall St. announces its post-earnings coverage on The Wendy's Co. (NASDAQ: WEN). The Company announced its financial results for the first quarter fiscal 2017 (Q1 FY17) on May 10, 2017. The Dublin, Ohio-based Company's adjusted EBITDA margin improved on a year-over-year basis. Register with us now for your free membership at:

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One of The Wendy's' competitors within the Restaurants space, Texas Roadhouse, Inc. (NASDAQ: TXRH), announced on May 01, 2017, its financial results for Q1 2017 which ended on March 28, 2017. AWS will be initiating a research report on Texas Roadhouse in the coming days.

Today, AWS is promoting its earnings coverage on WEN; touching on TXRH. Get our free coverage by signing up to:

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Earnings Reviewed

Wendy's reported total revenues of $285.82 million in Q1 FY17, which came in below the $378.79 million recorded in Q1 FY16. However, total revenues numbers for Q1 FY17 topped market consensus estimates of $279.3 million. The Company attributed the 24.6% decline in revenues to 301 fewer Company-operated restaurants at the end Q1 FY17, resulting in lower sales, partly offset by higher franchise royalty revenue and fees and franchise rental income.

In Q1 FY17, sales declined to $148.21 million from $259.33 million in the last year's same quarter. Meanwhile, franchise royalty revenue and fees grew to $94.69 million in Q1 FY17 from $88.90 million in Q1 FY16. Franchise rental income also increased to $42.92 million in Q1 FY17 from $30.56 million in the last year's comparable quarter.

The hamburger chain's net income for Q1 FY17 came in at $22.34 million, or $0.09 per diluted share, compared to $25.37 million, or $0.09 per diluted share, in Q1 FY16. The Company's adjusted earnings for the reported quarter were $0.09 per share compared to $0.11 per share in the prior year's same period. Moreover, Wall Street had expected the Company to report net income of $0.08 per diluted share.

Operating Metrics

For Q1 FY17, the Company's total costs and expenses were $225.10 million compared to $314.96 million in the previous year's same quarter. The Company's operating profit was down to $60.72 million in Q1 FY17 from $63.83 million in the prior year's same period. Adjusted EBITDA for Q1 FY17 came in at $89.17 million, or 31.2% of total revenues, compared to $98.10 million, or 25.9% of total revenues, in Q1 FY16. Additionally, total restaurant margin fell to 16.7% in Q1 FY17 from17.2% in Q1 FY16, primarily due to increased labor rates, partly offset by lower commodity costs.

During the quarter ended February 28, 2017, the Company inaugurated 18 new stores, adding net of six stores in North America. Furthermore, in Q1 FY17, 15 new stores were opened internationally with a net addition of eight new stores.

Cash Flow & Balance Sheet

For the three months ended on April 02, 2017, Wendy's reported net cash provided by operating activities of $38.65 million compared to $50.81 million in the year ago comparable period. The Company reported free cash flow of $23.8 million in Q1 FY17 versus $12.0 million in the previous year's corresponding period.

The Company had cash and cash equivalents balance of $193.24 million as on April 02, 2017, compared to $198.24 million, at the close of books on January 01, 2017. Furthermore, the Company ended the quarter with total long-term debt of $2.53 billion compared to $2.49 billion as on January 01, 2017.

Dividend and Share Repurchase

In its earnings press release, the Company declared the regular quarterly cash dividend of $0.07 per share, payable on June 15, 2017, to shareholders of record as of June 01, 2017.

During Q1 FY17, the Company repurchased 1.3 million shares for $17.8 million at an average price of $13.50 per share. Furthermore, the Company has approximately $132 million remaining on its existing $150 million share repurchase authorization, which expires on March 04, 2018.

Earnings Outlook

In its guidance for full year FY17, Wendy's expects adjusted EBITDA to be between $400 million to $406 million. The Company-operated restaurant margin for FY17 is anticipated to be approximately 18.5%. Meanwhile, adjusted earnings per share for FY17 are projected to be in the range of $0.45 to $0.47, with an increase of approximately 13% to 18% y-o-y. Furthermore, free cash flow during full year FY17 is anticipated to be in the range of $160 million to $185 million.

Stock Performance

On Wednesday, May 31, 2017, the stock closed the trading session at $16.17, slightly rising 0.12% from its previous closing price of $16.15. A total volume of 3.93 million shares have exchanged hands, which was higher than the 3-month average volume of 2.57 million shares. The Wendy's stock price skyrocketed 16.25% in the last three months, 24.96% in the past six months, and 57.30% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 19.60%. The stock is trading at a PE ratio of 33.34 and has a dividend yield of 1.73%. The stock currently has a market cap of $4.03 billion.

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SOURCE: Active Wall Street