Wendy's to buy back shares worth $1.4 billion

by Erica Shaffer
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Wendy's bacon and blue on brioche burger
Wendy's plans to sell more restaurants in 2016.

DUBLIN, Ohio – The Wendy’s Company launched a stock repurchase program valued at $1.4 billion.

The company will begin a buyback of $850 million starting June 3. The plan also includes a separate purchase of up to $211 million of the company’s stock from the Trian Group, its largest shareholder. Trian owns an aggregate of approximately 24.8 percent of Wendy’s outstanding common stock. Trian intends to reduce its ownership in Wendy’s to between 17 and 19.68 percent.

“Our recent operating results, along with the shareholder-value enhancing initiatives and updated outlook announced today demonstrate continued progress with our brand transformation,” Emil Brolick, president and CEO, said. “The growth reflected in our long-term outlook, especially our expectations for steadily increasing adjusted EBITDA margins, demonstrates the higher quality of earnings we are generating as a result of our system optimization initiative, which remains on track for completion in 2016. The enhanced earnings stream includes increased royalties and rental income from the 674 properties we own.”

For its 2015 outlook, Wendy’s expects earnings per share of approximately 31 cents to 33 cents, which is an increase of 10 to 17 percent compared to the company’s 2014 adjusted EPS. The change reflects the company sale of its bakery operations.

For its long-term outlook, Wendy’s anticipates selling 100 restaurants in its Canadian business in addition to the planned sale of approximately 540 US restaurants by the middle of 2016. The company forecasts its average annual system wide same-restaurant sales growth at approximately 2.25 to 3 percent beginning in 2016.

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