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The Wendy's Co (The Wendy's Co) Gross Margin %

: 38.65% (As of Dec. 2023)
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Gross Margin % is calculated as gross profit divided by its revenue. The Wendy's Co's Gross Profit for the three months ended in Dec. 2023 was $209 Mil. The Wendy's Co's Revenue for the three months ended in Dec. 2023 was $541 Mil. Therefore, The Wendy's Co's Gross Margin % for the quarter that ended in Dec. 2023 was 38.65%.

Warning Sign:

The Wendy's Co gross margin has been in long-term decline. The average rate of decline per year is -1.1%.


The historical rank and industry rank for The Wendy's Co's Gross Margin % or its related term are showing as below:

WEN' s Gross Margin % Range Over the Past 10 Years
Min: 30.3   Med: 35.72   Max: 49.14
Current: 34.16


During the past 13 years, the highest Gross Margin % of The Wendy's Co was 49.14%. The lowest was 30.30%. And the median was 35.72%.

WEN's Gross Margin % is ranked worse than
70.55% of 343 companies
in the Restaurants industry
Industry Median: 46.87 vs WEN: 34.16

The Wendy's Co had a gross margin of 38.65% for the quarter that ended in Dec. 2023 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for The Wendy's Co was -1.10% per year.


The Wendy's Co Gross Margin % Historical Data

The historical data trend for The Wendy's Co's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

The Wendy's Co Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Gross Margin %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 35.44 35.84 36.81 34.40 35.59

The Wendy's Co Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Gross Margin % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 37.96 33.89 29.55 34.70 38.65

Competitive Comparison

For the Restaurants subindustry, The Wendy's Co's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


The Wendy's Co Gross Margin % Distribution

For the Restaurants industry and Consumer Cyclical sector, The Wendy's Co's Gross Margin % distribution charts can be found below:

* The bar in red indicates where The Wendy's Co's Gross Margin % falls into.



The Wendy's Co Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

The Wendy's Co's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )=Gross Profit (A: Dec. 2023 ) / Revenue (A: Dec. 2023 )
=776.5 / 2181.578
=(Revenue - Cost of Goods Sold) / Revenue
=(2181.578 - 1405.11) / 2181.578
=35.59 %

The Wendy's Co's Gross Margin for the quarter that ended in Dec. 2023 is calculated as


Gross Margin % (Q: Dec. 2023 )=Gross Profit (Q: Dec. 2023 ) / Revenue (Q: Dec. 2023 )
=208.9 / 540.651
=(Revenue - Cost of Goods Sold) / Revenue
=(540.651 - 331.714) / 540.651
=38.65 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


The Wendy's Co  (NAS:WEN) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

The Wendy's Co had a gross margin of 38.65% for the quarter that ended in Dec. 2023 => Competition eroding margins


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


The Wendy's Co Gross Margin % Related Terms

Thank you for viewing the detailed overview of The Wendy's Co's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.


The Wendy's Co (The Wendy's Co) Business Description

Traded in Other Exchanges
Address
One Dave Thomas Boulevard, Dublin, OH, USA, 43017
The Wendy's Company is the second-largest burger quick-service restaurant, or QSR, chain in the United States by systemwide sales, with $11.7 billion in 2022, narrowly edging Burger King ($10.3 billion) and clocking in well behind wide-moat McDonald's ($48.1 billion). After divestitures of Tim Hortons (2006) and Arby's (2011), the firm manages just the burger banner, generating sales across a footprint that spanned almost 7,100 total units in 30 countries as of year-end 2022. Wendy's generates revenue from the sale of hamburgers, chicken sandwiches, salads, and fries throughout its company-owned footprint, through franchise royalty and marketing fund payments remitted by its franchisees, which account for 94% of stores, and through franchise flipping and advisory fees.
Executives
Joseph A Levato director C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017
Trian Fund Management, L.p. other: Schedule 13D Filer 280 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10017
Kenneth W Gilbert director C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017
Michelle Caruso-cabrera director C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017
Liliana Esposito officer: Chief Communications Officer ONE DAVE THOMAS BLVD., DUBLIN OH 43017
Nelson Peltz director, 10 percent owner, officer: Chairman and CEO 223 SUNSET AVENUE, PALM BEACH FL 33480
Edward P Garden officer: Executive Vice President 223 SUNSET AVENUE, PALM BEACH FL 33480
Peter W May director, 10 percent owner, officer: President and COO 223 SUNSET AVENUE, PALM BEACH FL 33480
Matthew H. Peltz director 280 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10017
Trian Partners Master Fund, L.p. other: Schedule 13D Filer 280 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10017
Deepak Ajmani officer: Chief Operations Officer - U.S C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017
Juan Carlos Loredo officer: Global Chief Marketing Officer C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017
Suzanne M. Thuerk officer: Chief Accounting Officer ONE DAVE THOMAS BLVD., C/O THE WENDY'S COMPANY, DUBLIN OH 43017
Richard H. Gomez director 1000 NICOLLET MALL, MINNEAPOLIS MN 55403
O'brien Matthew Coley officer: Chief People Officer ONE DAVE THOMAS BLVD., DUBLIN OH 43017