The Wendy’s Co (WEN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 42.85% | 42.83% | 42.48% | 42.19% | 44.79% | 45.34% | 46.22% | 47.20% | 48.42% | 53.07% | 51.29% | 48.80% | 45.81% | 45.97% | 45.93% | 46.46% | 47.53% | 48.93% | 49.01% | 54.42% |
| Operating profit margin | 17.51% | 17.42% | 17.41% | 16.99% | 16.86% | 17.04% | 16.66% | 18.63% | 19.34% | 19.42% | 19.67% | 16.98% | 15.53% | 13.49% | 13.46% | 14.37% | 15.36% | 16.17% | 16.44% | 16.13% |
| Pretax margin | 12.81% | 12.41% | 12.11% | 11.61% | 11.62% | 11.63% | 11.25% | 12.31% | 12.68% | 12.50% | 12.52% | 10.40% | 8.81% | 8.16% | 8.29% | 8.96% | 10.03% | 9.43% | 36.77% | 37.11% |
| Net profit margin | 9.37% | 9.13% | 8.86% | 8.42% | 8.46% | 9.26% | 9.08% | 10.20% | 10.56% | 9.85% | 9.87% | 8.09% | 6.80% | 6.26% | 6.70% | 7.01% | 8.01% | 7.69% | 28.88% | 29.16% |
Wendy's Co has maintained relatively stable gross profit margins over the past eight quarters, ranging from 63.10% to 63.94%. This indicates the company's ability to effectively manage its production costs and pricing strategies to generate profits from its core operations.
The operating profit margin has also shown consistency, with minor fluctuations between 15.86% and 17.56%. This suggests that Wendy's has been efficient in controlling its operating expenses in relation to its revenue, leading to healthy profitability at the operational level.
The pretax margin has exhibited a moderate trend, with figures ranging from 11.25% to 12.81%. This metric reflects Wendy's performance in managing its pre-tax income in relation to its total revenue, indicating the company's effectiveness in dealing with taxes and other non-operational expenses.
However, the net profit margin has shown some variability, with figures fluctuating between 8.42% and 10.20%. This ratio signifies the company's overall profitability after accounting for all expenses, including interest and taxes. Wendy's experienced a slight decline in net profit margin in Q4 2023 compared to the previous quarter, which may warrant further investigation into potential factors affecting the company's bottom line.
In conclusion, Wendy's Co has demonstrated strong profitability ratios in terms of gross profit margin and operating profit margin, indicating efficient cost management and operational performance. While the pretax margin has remained relatively stable, fluctuations in the net profit margin suggest potential areas for further analysis and improvement to sustain and enhance overall profitability levels in the future.
Return on investment
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.37% | 7.17% | 7.02% | 6.71% | 6.42% | 6.27% | 5.95% | 6.45% | 7.19% | 7.15% | 7.16% | 6.13% | 5.34% | 4.58% | 4.44% | 4.92% | 5.26% | 5.29% | 5.23% | 5.03% |
| Return on assets (ROA) | 3.94% | 3.76% | 3.57% | 3.32% | 3.23% | 3.41% | 3.24% | 3.53% | 3.93% | 3.63% | 3.59% | 2.92% | 2.34% | 2.13% | 2.21% | 2.40% | 2.74% | 2.52% | 9.19% | 9.10% |
| Return on total capital | 13.26% | 12.73% | 12.23% | 11.72% | 11.13% | 10.81% | 10.20% | 10.44% | 12.52% | 12.10% | 11.97% | 11.15% | 9.77% | 9.22% | 9.30% | 9.95% | 10.36% | 9.41% | 24.71% | 24.44% |
| Return on equity (ROE) | 66.00% | 58.03% | 48.90% | 42.85% | 38.09% | 43.03% | 42.30% | 43.22% | 45.92% | 34.45% | 32.54% | 27.80% | 21.44% | 20.25% | 23.14% | 26.49% | 26.52% | 19.90% | 73.20% | 73.65% |
Wendy's Co profitability ratios have shown consistent improvement over the past quarters. The Operating return on assets (Operating ROA) has displayed an upward trend, indicating the company's ability to generate operating profits from its assets. This ratio ranged from 5.65% in Q1 2022 to 7.29% in Q4 2023.
Return on assets (ROA) also exhibited a positive trend, reflecting the company's efficiency in generating profits from its total assets. It increased from 3.23% in Q4 2022 to 3.94% in Q4 2023.
Return on total capital and Return on equity (ROE) experienced fluctuations but generally improved over the quarters. The return on total capital ranged from 8.42% in Q1 2022 to 10.65% in Q3 2023, while the ROE ranged from 38.09% in Q4 2022 to 66.00% in Q4 2023.
Overall, Wendy's Co profitability ratios indicate a positive performance in utilizing assets and capital to generate profits, with increasing returns to shareholders over the quarters.