Wendy's (NASDAQ: WEN) reported Q4 EPS of $0.10, in-line with the analyst estimate of $0.10. Revenue for the quarter came in at $502 million versus the consensus estimate of $509.5 million.

Wendy's Company-operated restaurants generated a same-restaurant sales increase of 1.9 percent in the fourth quarter of 2014 and 5.0 percent on a two-year basis. Franchise same-restaurant sales in North America increased 1.6 percent during the quarter.

"We continued to strengthen our system through the selective buying of restaurants, along with selling restaurants to franchisees with a commitment to Image Activation, high operating standards and new restaurant development. These efforts contributed to improved financial performance, highlighted by 2014 Company-operated same-restaurant sales growth of 2.3 percent, record average annual unit sales volumes of $1.59 million at North America Company-operated restaurants, and overall Adjusted EBITDA and Adjusted Earnings Per Share performance in line with our expectations.

"As we look to 2015 and beyond, we plan to continue improving the quality of our earnings by growing same-restaurant sales, expanding margins and evolving our plans for system optimization," Brolick said. "We expect that the net result will be a reduction in Company-operated restaurant ownership to approximately 5 percent of the total system by the middle of 2016. We believe this reduction in ownership will result in pretax cash proceeds of approximately $400 to $475 million and significantly reduce future capital expenditure requirements.

"As a result of our expectations for our improved free cash flow and sustainable earnings growth, along with our significant real estate ownership and the expected proceeds from the sale of Company-operated restaurants, we plan to take advantage of the current attractive capital markets environment and low interest rates to recapitalize our balance sheet, targeting a leverage ratio of five to six times net debt to 2014 Adjusted EBITDA," Brolick said. "We intend to use these proceeds to return substantial cash to shareholders during 2015.

"In addition, our success with Image Activation and our proven track record of innovation gives us the confidence that we can achieve long-term average annual Systemwide same-restaurant sales growth of approximately 2.25 to 3.0 percent beginning in 2016, along with our system goal for average annual unit sales volumes of $2.0 million by 2020."

Wendy's sees FY2015 EPS of $0.33 - $0.35, versus the consensus of $0.39.

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