Wendy's Net Loss Widens, Dividend Doubles

Wendy’s Co. (NASDAQ: WEN) this morning said its net loss widened in the third quarter as it paid off debt, but it also doubled its dividend and announced a $100 million share repurchase program.

Excluding restructuring and other charges, the world’s third largest hamburger fast-food chain posted adjusted earnings per share (EPS) of $0.03 on revenues of $636.3 million for the quarter. In the same period a year ago, it reported $0.05 per share on $611.4 million. This quarter’s results also compare to the Thomson Reuters estimates for adjusted EPS of $0.05 and $640.1 million in revenues.

North America company-operated restaurants generated a same-store sales increase of 2.7%. Franchise same-store sales in North America increased 2.9% during the quarter. This was the sixth consecutive quarter of positive same-store sales for both categories.

The president and CEO said:

The Board of Directors and management are committed to delivering on our core organic growth strategies and stockholder value-enhancing initiatives. Our stable free cash flow franchise business model and substantial cash position allow us to continue to reinvest in the core business and return capital to stockholders. Our anticipated significant free cash flow allows us to double our dividend and provides the Company the ability to sustain it at this higher rate, while also commencing a $100 million share repurchase program.

For 2012, the company reiterated its outlook for adjusted EBITDA from continuing operations in a range of $320 million to $335 million. And its preliminary 2013 outlook calls for adjusted EBITDA of $350 million to $360 million.

The Thomson Reuters full-year 2012 forecast is for $0.15 per share earnings on $2.51 billion in revenues.

Shares are more than 1% lower in premarket trading to $4.21. The 52-week range is $4.09 to $5.50. Before this morning’s report, the mean price target was $5.00.

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