Is The Business Growing?

Growth results tell a bit of a mixed bag.

10/5/1 CAGR for revenue is 1.2%/5.6%/3%

Net Income's 10/5/1 tells a more sporadic story: 4.8%/7.3%/-4.9%

Total Equity has dropped precipitously, I gotta investigate this. 10/5/1 is -17%/-12%/-16%

FCF jumps all over the place. It was negative 10 years ago, so we can't CAGR that. But 5 year CAGR is 4%

Their actual revenue breakdown tells an interesting picture:

• "Sales" were down 4.2%.

• Franchise royalty revenue and fees was up 33%

• Franchise rental income was up 6.3%

• Advertising funds revenue was up 29%.

In this case, Sales means solely the company operated stores (a bit confusing).

Wendy's calls out the decrease in Sales due to:

• "The decrease in sales during 2024 was primarily due to (1) net closures of Company-operated restaurants of $3.1 million and (2) a 0.1% decrease in Company-operated same-restaurant sales of $2.4 million. Company-operated same-restaurant sales decreased due to a decrease in customer count, partially offset by higher average check."

There's an insight here. They are definitely doubling down on the franchise model.

Yeah, it seems like the key to their growth strategy is international growth ($1.8B in US, only $144M internationally) and doubling down on franchise models.

Studying their balance sheet is going to be important.