The largest investor in The Wendy’s Co., Trian Fund Management L.P., said Friday it would not pursue a takeover of the burger brand as the company pre-released earnings for the Jan. 1-ended fourth quarter and fiscal year.
Trian, which with affiliates holds more than 19% of Wendy’s shares, last May said it had discussed strategic options with the Dublin, Ohio-based company’s board.
Wendy’s on Friday released preliminary results for the fiscal 2022 year, saying same-store sales for the fourth quarter rose 5.9% domestically and 9.9% internationally. Profit in the fourth quarter increased to $84 million from $76.9 million in the same period last year, and total revenues rose to $536.5 million from $473.2 million in the prior-year quarter.
The company said it increased its quarterly dividend to 25 cents a share, and the board authorized a $500 million share repurchase.
Wendy’s, along with its preliminary results, released a statement from Nelson Peltz, CEO and founding partner of the Trian Fund as well as Wendy’s non-executive chair.
The hedge fund indicated earlier this week that it would turn some attention to entertainment giant Disney and its newly re-installed CEO Bob Iger. Trian Fund on Wednesday said it would nominate Peltz as a director to the board of The Walt Disney Co.
Peltz, whose Trian has been invested in Wendy’s International Inc. (the predecessor of The Wendy’s Co.) since late 2005, in his statement said: “Trian believes strongly in the future of Wendy’s, is confident in the company’s growth plans and is strongly supportive of the capital allocation strategy announced today.”
Peltz continued: “Trian believes that the company is well positioned to deliver significant long-term value for shareholders and looks forward to continuing to work with the board and leadership team to do so.”
The Wendy’s Co. plans to release full 2022 financial results on March 1, but the preliminary earnings indicated a strong fourth quarter for the burger brand.
“Our 2022 results highlight the strength and resiliency of the Wendy’s brand as we continued to deliver compelling sales and profit growth,” said Todd Penegor, Wendy’s CEO and president, in a statement. “During the year, global same restaurant sales reached double digits on a two-year basis for the second consecutive year, company restaurant margins expanded by almost 300 basis points in the fourth quarter versus the first quarter, and we opened over 275 restaurants across the globe.”
Also on Friday, Wendy’s said it intends to launch a broader redesign of its organizational structure and expects its 2023 and 2024 general and administrative expenses to remain flat. It reiterated its three strategic pillars of building its breakfast daypart, accelerating its digital business and growing its global footprint.
Wendy's, founded in 1969, has about 7,000 restaurants worldwide.
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