Wendy’s earnings per share down 9% in 4Q14

The Wendy’s Company (WEN) reported a quarterly adjusted earnings per share (or EPS) of $0.10. Wendy’s earnings per share were down 9% compared to its EPS of $0.11 in the fourth quarter of 2013.

The dip in EPS was primarily due to a decline in revenues from company-operated stores. This was a result of a system optimization initiative in which the company has been selling its company-operated restaurants to franchises since 2013.

Operating profit margins improved from 4.8% in 4Q13 to 10.3% in 4Q14.

The Wendy’s Company (WEN) reported its earnings on February 3, 2015. It operates restaurants around the world under the fast food format. As of the fourth quarter ended December 28, 2014, Wendy’s had 6,532 restaurants systemwide. Of these, 5,537 restaurants were franchised and 995 restaurants were company-operated. To learn more about company-operated and franchise business models, read the series An in-depth overview of the US restaurant industry.

Wendy’s peer McDonald’s (MCD) reported an EPS of $1.13, which declined 19% compared to the EPS of $1.40 in 4Q14. Another peer, Yum! Brands (YUM), reported an EPS of -$0.61, which was 6% down compared to the EPS of $0.87 in 1Q14.

An investor looking to invest in the restaurant industry as a whole can get exposure through ETFs such as the Consumer Discretionary Select Sector SPDR Fund (XLY), which holds ~4% of McDonald’s (MCD) and Starbucks (SBUX).

In this quarterly overview series for Wendy’s (WEN), we’ll take an in-depth look into the earnings and key valuation metrics such as same-store sales, impact of costs, management’s strategic initiatives for the future, and how the market reacted to the earnings. Finally, we’ll look at Wendy’s stock from an investor’s perspective.