Q4 Earnings Roundup: Wendy's (NASDAQ:WEN) And The Rest Of The Traditional Fast Food Segment

Max Juang /
2024/04/15 4:01 am EDT

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Wendy's (NASDAQ:WEN) and the rest of the traditional fast food stocks fared in Q4.

Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.

The 15 traditional fast food stocks we track reported a decent Q4; on average, revenues beat analyst consensus estimates by 0.6%. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, though the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and traditional fast food stocks have held roughly steady amidst all this, with share prices up 1.3% on average since the previous earnings results.

Wendy's (NASDAQ:WEN)

Founded by Dave Thomas in 1969, Wendy’s (NASDAQ:WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.

Wendy's reported revenues of $540.7 million, flat year on year, falling short of analyst expectations by 1.1%. It was a slower quarter for the company, with underwhelming earnings guidance for the full year and a miss of analysts' revenue estimates.

"The Wendy's® system delivered strong sales, profit, and cash flow growth in 2023, all supported by progress on our strategic growth pillars," President and Chief Executive Officer Kirk Tanner said.

Wendy's Total Revenue

The stock is down 3.6% since the results and currently trades at $18.59.

Read our full report on Wendy's here, it's free.

Best Q4: Yum China (NYSE:YUMC)

One of China’s largest restaurant companies, Yum China (NYSE:YUMC) is an independent entity spun off from Yum! Brands in 2016.

Yum China reported revenues of $2.49 billion, up 19.4% year on year, outperforming analyst expectations by 7%. It was a stunning quarter for the company, with revenue outperforming Wall Street's estimates, driven by better-than-expected same store sales and a higher number of locations. Profitability was solid, leading to an EPS beat. Looking ahead, the company reiterated that from 2024 to 2026, system sales and profit profit will grow at high-single-to-double-digit CAGRs, leading to a double-digit CAGR for EPS.

Yum China Total Revenue

Yum China achieved the biggest analyst estimates beat among its peers. The stock is down 0.4% since the results and currently trades at $37.31.

Is now the time to buy Yum China? Access our full analysis of the earnings results here, it's free.

Weakest Q4: Starbucks (NASDAQ:SBUX)

Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ:SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.

Starbucks reported revenues of $9.43 billion, up 8.2% year on year, falling short of analyst expectations by 2.1%. It was a weak quarter for the company, with a miss of analysts' revenue and EPS estimates.

The stock is down 9.4% since the results and currently trades at $85.27.

Read our full analysis of Starbucks's results here.

McDonald's (NYSE:MCD)

Arguably one of the most iconic brands in the world, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience, value, and wide assortment of menu items.

McDonald's reported revenues of $6.41 billion, up 8.1% year on year, falling short of analyst expectations by 0.7%. It was a mixed quarter for the company, with an impressive beat of analysts' gross margin estimates and a narrow beat of analysts' earnings estimates. On the other hand, revenue unfortunately missed analysts' expectations, driven by a same-store sales miss.

The stock is down 9.7% since the results and currently trades at $268.34.

Read our full, actionable report on McDonald's here, it's free.

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