The Wendy’s Company (NASDAQ:WEN) Q4 2022 Earnings Call Transcript

Jared Garber: Great. Thanks for the question and squeezing me in. You kind of mentioned it, but just wanted to get a sense of on the dividend. Was there a discussion around doing a special dividend in the fourth quarter and the first quarter here? And maybe how you came to the decision to increase at a 100% versus maybe doing a special? And then just a quick follow-up on the company-restaurant margins. Maybe you can help frame where you saw a little bit more favorability in the quarter? Was it lower beef costs, better labor? Just any incremental color on the line items there would be helpful. Thanks so much.

Todd Penegor: Good morning, Jared. Yes. So I don’t want to get into the details of the working discussions on Board level, special dividend versus regular dividend versus share repurchases. I think collectively with the Board, we landed on a very attractive, I think, capital allocation action basically increasing the dividend to 100% and making this regular dividend action and do the famous $0.5 billion of share repurchases. So yes, I don’t want to get into the discussions around all the details how we got there. But I think the outcome is positive. On the restaurant margin, really happy. As you have seen in the consolidated numbers, we are landing flat on prior year. If you actually peel this back a little bit, the U. S. company restaurants landed actually at 15.2% and they were actually favorable, so up versus prior year’s quarter by about 20 basis points.

So that went well. So that tells you we are really starting to truly approach pre-COVID margin levels. I might remind you that was in 2019, our U. S. company-restaurant margin was 15.5%, and that despite really still relatively elevated inflationary pressures we had in the fourth quarter. More detail in terms of what happens to labor, pricing mix, we’ll give all of that out when we are fully analyzed in detail our results beginning of March.

Operator: Thank you, Jared. That was our last question of the call. Thank you, Todd and GP, and thank you, everyone, for participating this morning. We look forward to speaking with you again on our call in March. Have a great day. You may now disconnect.