Wendy's reported a profit for the first-quarter ended April 2, 2017 that declined 12.2 percent from last year.
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This is reflecting a year-over-year increase in other operating expense that was related to a lease buyout gain recognized in the first quarter of 2016, partly offset by lower depreciation and amortization expense and reorganization and realignment costs.
It reiterated adjusted earnings per share outlook for fiscal 2017.
The company reiterated 2020 G&A expense savings target of approximately $35 million; expects to achieve approximately three-quarters of savings by end of 2018.
Net income for the first-quarter of 2017 declined 12.2 percent to $22.3 million from the previous year's $25.4 million, while quarterly earnings per share were $0.09 flat with last year.
Adjusted earnings per share were $0.09 in the first quarter of 2017, compared to $0.11 in the first quarter of 2016.
The 18.2 percent decrease resulted primarily from the certain items and reflects a 7 percent year-over-year reduction in the weighted average diluted shares outstanding.
Operating profit was $60.7 million in the first quarter of 2017, compared to $63.8 million in the first quarter of 2016.
The 4.9 percent decrease resulted primarily from a year-over-year increase in other operating expense that was related to a lease buyout gain recognized in the first quarter of 2016, partly offset by lower depreciation and amortization expense and reorganization and realignment costs.
General and administrative expense was $52.4 million in the first quarter of 2017, compared to $64.7 million in the first quarter of 2016.
The 19.0 percent decrease resulted primarily from lower professional fees and legal reserves, a year-over-year decrease in incentive compensation accruals and cost savings related to the company's system optimization initiative.
Total revenues for the first-quarter declined about 24.6 percent to $285.8 million from $378.8 million last year. Analysts expected revenue of $282.57 million for the quarter.
The decrease resulted primarily from the ownership of 301 fewer company-operated restaurants at the end of the first quarter 2017 compared to the beginning of the first quarter 2016, which resulted in fewer sales at company-operated restaurants, partly offset by higher franchise royalty revenue and fees and franchise rental income.
The company-operated restaurant margin was 16.7 percent in the first quarter of 2017, compared to 17.2 percent in the first quarter of 2016.
The 50 basis-point decrease was primarily the result of increased labor rates, partly offset by lower commodity costs. ■