WEN - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to The Wendy's Company Earnings Results Conference Call. I will now turn the conference over to Greg Lemenchick, Director, Investor Relations. Please go ahead, sir.

Greg Lemenchick

Thank you, and good morning, everyone. webcast Investors PowerPoint www.wendys.com. section and available which call the on of conference includes presentation, a is Today's our website

statements. in we projections is of adjusted end cause differ measures note that non-GAAP adjusted take comparable directly adjusted that some results certain This begin forward-looking and and financial Safe may investors set Investors refer factors measures Before statement tax discuss materially EBITDA, measure. could margin, we systemwide GAAP Harbor reference our comments our will flow, should adjusted today disclosure of to Also, today's reminds EBITDA to appears Various free our from those of the share, such the the revenue, forth earnings financial results our to information most the cash sales. earnings forward-looking. release. non-GAAP rate, reconciliations at as per adjusted please affect of

initiatives update we and full-year hand Plosch. Our conference Todd. a the things Chief outlook quarter our our fourth call as key Penegor; preliminary I'll Todd for Executive there, that, up review Gunther today President an Financial With from of and XXXX From will on Chief Officer, Officer, will and as from open XXXX our well provide line results, our questions. to over

Todd Penegor

even ladder to this to most remarks with Wendy's restaurant to today's world's to up as important beloved Everything I'd The open become is brand. our an remember vision that do Thanks, brand. like Greg, goal everyone. to at and build good and vision it is needs stronger thriving morning, we the Wendy's to

and we more achieve our will for and our see powerful growth remarks vision. that focused today is us are that turn throughout help long-term sustained vision setup will you becoming in Our

with to flow this X.X% translating significant our that $XXX on of eighth year on million systemwide We company Before with of last were into XXXX North few same-restaurant flow beyond. of sales I'm sales showcasing that we the growth cash, global our is strategy achieved meaningful we want and tax financial an that some same-restaurant and say is proud restaurant as able $XXX results our to growth I flows on customer of several strong quickly Throughout years. million demonstrated over additional a highlights consistency from streak our into let's growth Brands' focused the a XXXX, was free August we we finally, a consecutive which and monetized is are as this retaining our have base and alive ownership business which testament before in Inspire to we growth in growth million in know, And and we in share shareholders growth, and is generation, which strong model. achieved on growing we well cash XXXX, plan a and return dividends. after-tax. repurchases successful. free American to time XX% sales for We dive free EPS to spend XXXX. begin resilient backdrop efficient adjusted expansion keeping approximately With approximately way cash as the generation. our of cash X% the XX% growth, you adjusted increase $XXX our interest EBITDA

category traffic we QSR to in share is As years. last the Burger which accomplished have the we a three grow our result, continue something over

and We that ensure restaurant with to QSR our and I XX% with as into affordability, XXXX, over profitable. franchisees now now With providing visits convenience, than that, are be we the to quality. place restaurants separating As our need deliver GP while and with on our that can and details believe more on we all partnering we will with that we results. the sound will XXXX consumer move speed, are to ourselves are promotions consumers are of them are things long-term, hand win often positioned continue is provide to more for who we into to that well bring operationally the over more

Gunther Plosch

Thanks, Todd.

it our the limited Cheeseburger majority for and these be pairing a to ran and statements. inclusive recast XXXX, the Any recast Maple the revenue results the In As the Please a two offering quarter refer which P&L financial back of reminder, year we will of basis, offers, the we premium Bacon Chicken recognition time the fourth of versus in discussing reconciliation the the is other prior Fry all on throughout reclassifications. with a quarter, $X earnings Bacon of Size of release S'Awesome of tables Sandwich. impact

due fourth driven average in company and higher We previously drove which case was by recorded decreased high-low profitability sales in reserve and of Adjusted offerings had a that increase company in drove as check. sales our XX to X.X%. the activity impacted an our actions. was royalties. to quarter same-restaurant of fourth did increased optimization lower the quarter increase the While X.X% financial we sales, sales, year-over-year This due market by same-restaurant a to they settlement a $XX.X increased announced pricing our not in and by partially restaurant margin franchise positive labor addition to restaurants lower strategy, This company benefit. the create rate XX institution million mix revenues of acquiring Columbus system driven to G&A. basis relating in ongoing legal in promotional XXXX the by restaurant The XX% the planned the part company points offset inflation

was and by million XX% EBITDA versus to year expanded to increased as $X.XX. grew share This initiative. the in by incentive $X.XX the million four compared $XXX.X prior $XX million and of XXX G&A XXXX. result EBITDA compensation this in Excluding earnings primarily was savings of a G&A to Adjusted lower decrease lower quarter adjusted result points. benefits XX% per the Adjusted and reserve, $XX salaries basis company's of by the margin accrual

This revenues in our well Moving result the in driven to of EBITDA the resiliency contributing model. compensation $XXX a financial royalties decrease XXX primarily of changes activity, by impact adjusted our franchise and by increase due from our stock Also from an was share significantly to rate increase G&A an and company and of the in Adjusted the ongoing benefited shares to million increased primarily tax to adjusted rental positive result as XX%. $X.XX, company as to points Year-over-year, increase increase rental XX.X% labor sales growth the on offset company an previously inflation, benefits lower was by This same-restaurant margin driven X.X%. sales. high to restaurant in share full-year results. compared initiative. outstanding business result an X% expense earnings per from programs. was the of had increase was savings Tax an and growth due by and restaurant of repurchase same-restaurant as XXXX options acquisitions the from $XXX X% and reserve. incentive in insurance and savings XXXX lower revenue. X.X% We showcase fewer in of sales lower salaries the increased of net a million to in Adjusted royalties partially mentioned a excluding driven income, company's EBITDA basis was initiative accrual, actions. company's development. to We Law commodity inflation, rate pricing positive was This G&A U.S. as the cost, accrual compensation and which the G&A legal lower as increase benefit new a and continue the strong we decreased incentive increased restaurant

cash growth around in XXXX. to our strong Now some flow moving free on details

impact by was is things our our to changes, to Our back was talk flow driven of as partially flows to we growth. With favorable related XXXX Law free delivered hard taxes cash paying The our to strong core capital work core over primarily initiative. drive by XXXX. that, savings earnings I Todd impact from the cash initiatives. This Tax compared U.S. cash growth XX% working the and off capital, the from pass initiative, will cash increase strategic lower offset our G&A about to

Todd Penegor

Thanks, GP.

progress growth of years existing made build and we formula restaurants, expanding brand last In executing our a number of our and more proud re-imaging life. ensuring to customers by the to foundation in XXXX, in XXXX the partnership strengthen several strengthen approach. enjoy and brand marketing restaurants, continue well-balanced often franchisees by we over bring to to the the with our our of are We more Wendy's will

drive growth will have excellence, the open at which model our to Our our to and we very growth. net same-restaurant one, a further pace drive capabilities. and job is in new invest in this strong we restaurants economic growth. we organic the our benefits, operational Accelerating sales With more model, unit sales story, is to simple, globe America better restaurant accelerate years global will access a to around with drive we give which now the expansion of restaurant brand evolve at digital folks consecutive economic to drive vital same-restaurant North will fuel to restaurant and our formula healthy delivered tactics is we marketing mix three forefront

that stronger building in front, we XXXX same-restaurant will believe we the sales foundation how America, the pay will building in We long plan to North in leadership international continue accelerate on on accelerate to the North will run. blocks and through new you on a walk focus XXXX. I we in America dividends under will

into benefit As coming the of I our earlier, we mentioned have already restaurants. customers

good So we a are starting from place.

JBC visit, in to are dollar which acceleration point of line the capitalize this and this. you've come platform strategy Our seen of to ran our of sales. a introduction examples "Made and to the mix The be to opportunity creates in one $X Hamburger This Crave" one life. will that more same-restaurant Giant focal our on already start an drive approach February will more January

Our decade. which more the menu innovation three "Made premium to is significant a in to the our menu to new change features most sandwiches Crave" than

the to to with to cater expand today's continued beef never a are We very quality. frozen on excited of focus line-up consumer fresh tastes different our our

our excellence to continue and place to will that on experience standout we them into Wright's to few progress in operations. leadership, consistent take We our oversee our bring profitable. to our have drive across to a system Under promotions offers Bob peers. customers are Building to that are our the and years, that brand the versus franchisees our more a ensure another level now that restaurant customer leader more working company our dedicated allow partner operational are last sound with providing we are operationally restaurants with to often we

our for franchise XXXX having always company With accelerate focus, and our have we to skin portfolio said pace excellence our this so and that dedicated can system. game, plan through and steward operational the the We beyond. leadership the restaurant the for be in we performance like set in system brand

Delight every vision it win. customer. Our Consistency for says is all. us critical to

to keep coming for to We so this XXXX have and life. focus more training back a system provided tools and have consistent to keen they the to our the customers, in want the have bring experience will a we

working We are several help this. we see throughput and that also drive will restaurants in speed initiatives as our opportunity and an on

supporting Lastly, to operate focus way go in a restaurants goals. major easier these a making our and is long will

began couple our ordering, initiated using digital launched have the Unified We rolled system. over offers, facing app America delivery the capabilities. of and meaningful the of North progress to Wendy's last consumer made mobile years of rollout with We mobile XX% out have

of release saw to across an stronger our invest forward. digital in you build a moving a this platforms As sense morning, urgency to foundation heightened with plan million we the $XX incremental

reports Kane of this our with tied Titus we digital by our Team. experience As to that efforts together Laura will consumer driven be Leadership organization XXXX, in has Kurt stand investment, Senior recently our ensure part view. will led a and digital marketing who of which fully up Laura are joined to point

this in we their capacity organization, be part leverage best-in-class capabilities them us and The Accenture drive have with as also we engaged this have flex we to to As new will space. to expertise allow partnering created needed. will and structure acceleration of

that are to XXXX. We equipment throughput are technology digital as insights will being benefits well provide can system consumers American competitive as such will are as our which digital in investments us speed, be increased initiatives. better behalf on convenience also our all a in that digital provide access impacting in later through restaurants and the be for successful scanners advantage as investments of for outlook consumer craving to financial believe more platforms. on in many our these clarity our enhanced presentation making support GP We the of how customization, will North

will our strategy number drive users and more app active of to downloads continue our offers. monthly our acquisition We app mobile through increase

enhanced the in and navigate consumers also have user-friendly it have customer positive feedback making and the us to these changes. giving easier We been experience app by on more

ordering mobile It that us in by rolling and a and we of expect create our with the one-to-one of Having our delivery expectations to it the mobile which the relationship with XXXX. begun to and this ordering scale year. order have customers, U.S. to our is in Expansion footprint allow system out SkipTheDishes XXXX. with in live build ahead activated begin U.S. We paced ultimate have to DoorDash is to awareness our will to across of the end start doing critical system we plan have restaurants goal.

to XX% XX% partners in with North of delivery We have grow end are grown this coverage by to our XXXX. America our to and footprint the expecting

We efforts of offer understand us are to the drive our potential be our same Getting the long will could run. fully will this that delivery doing scale in delivery. more know continue awareness to the still and through to we don't many advertising allow consumers partners what as

on Now in restaurant approximately three our go years accelerating grew we global X.X% let's XXXX global expansion. consecutive in global focus of deeper basis, resulting footprint. footprint our restaurant On by a into our

America. to growth one-third coming international X.X% XXXX our and from with two-thirds expect in North We from about approximately to reaccelerate

to similar we in cadence had by You in can XXXX be of openings to XXXX. the expect quarter the pacing

Let's American where we great now make progress. into dive Development, to North continue

pleased are about with came by we our American results XXXX as We North expectations our at Development growing in X%.

franchisees original who incremental a as great previously Our new very strong to on franchisee in groundbreaker of look development all first not signing restaurants is top a development start as of restaurants restaurant of a off have developers did commitments. signing up mix builders a beyond from incentive program experienced continues coming development sizes behind as we encouraging including and is are as engagement agreement These new their well to commitments increase. incremental time for up This XXXX at pipeline.

on creating the $X from investment have family while remain of Smart of We lowering designs customer Our economic investment the has created has trade all our options sales system. options relevant focused with and $X.X ranging investment now incentive proposition The best-in-class areas that million cost across a driven volumes. new to along experience. restaurants lower program to fit a excitement million compelling

to and under and our dedication look gives as again Abigail growth to to in international Our critical franchisees provide commitment gaining us our to confidence momentum long-term brand. we is Growing to business XXXX we access our growth Pringle's the quest in accelerate leadership. more are

International same-restaurant and miss net due franchisee with restaurant by XX% due some opening XXXX. system-wide mainly start did development also growing XXXX. timing transitions our the shifting highlights Let's restaurant some about into healthy sales X% but from growth. to We goal of grew to new sales

is development sustainable foundation we ensure our the plans a stronger long-term are to As building look global towards support the re-examining growth. team we future, to

new best and practices first five the months has the talent been team Over successful in differently. last development, by unlock has new bring years optimization. as will in over recruiting, of she that few future North reorganized market to and leverage playbook such added restaurant significant the the tenure, American Abigail's highly franchisee growth areas thinking system to the team This entry,

grow future. contributor growth a and We believe meaningful are will to our we committed brand in Wendy's to the the it internationally be

this to Day that give believe am you and year will grow our significantly we vision footprint. which confident I our international reasons details at strategy more provide the We can later will on Investor our

accelerating this our growth formula of up growth our and to All which America global expanding North Wendy's ladders is same-restaurant footprint. sales in restaurant

XXXX sales coming deliver X% in plans excited sales outlook unit net have GP I to the of will now is that things partially hand of goals. with will back provide approximately we expect to our from And financial We XXXX place. our new about by remaining driven X.X% with the and same-restaurant systemwide over X% new XXXX in to We're growth growth. which who

Gunther Plosch

now would you our XXXX like I to Todd. walk through Thanks, outlook.

to we in and digital presentation, expect the providing. As an we the incremental will within I investment platforms you our are mentioned see this $XX into make earlier million guidance

streamlined have the an for number We in guiding to outlook also key we to simplify our of and metrics. metrics are our annual effort focus

unchanged. into our we As remains move roadmap XXXX,

growth translating that an free systemwide cash expansion which a showcasing meaningful We sales backdrop are same-restaurant generation. is of efficient significant is company sales growth global into flow and on restaurant

starting our million look grow with we Now XXXX, to in recorded related X.X% includes adjusted expense. which let's EBITDA in that metrics, a approximately into scanners adjusted be In digital will to approximately key one-time to the financial X.X% deeper investment franchise expect take EBITDA. $XX

restaurant on same-restaurant to To expected Excluding EBITDA adjusted revenue sales will we as growth and labor organic inflation this initiatives which our by performance, same-restaurant be to our expected of accelerate X%. by company restaurant margin and expansion. margin development investment, X% as of inflation in well X% our offset restaurant commodity headwinds partially and X%. is growth are new driving focusing driven sales to X% productivity is royalty Contributing X% to

our and $XXX support our which incentive We to a driven approximately compensation initiatives. headwind is slight our expect primarily of resources savings adding XXXX digital ongoing additional from by million offset plan organization, partially G&A by G&A and international resetting experience to savings

adjusted to EPS. Moving on

X.X% adjusted in scanner. to one-time EPS the investment X% growth digital approximately expect of We includes which

we taxes effected This XXXX. $XXX XXXX, new expecting tax elevated impact, in increase $XXX this XX% a offset adjusted had scanners reorganization the rate. a investment in the investment by lower the authorization. million digital the comprised an is to capital improvements. we expenditures increase growth, is adjusted cost, in healthy tailwind $XX free of driven system. cash $XX digital by year-over-year this million expect will be primarily will million our the generation Accenture and expect North to driven partially and approximately to cash making tax outflow related increase how tax we accelerate cash the This I of in to a by and case. FI cash moment, Driving $XXX In we million XXXX. digital are the a our American million rate talk share and million through we $XX headwind X.X% stock the our are in cash EPS working behalf The on partnership will related are million to excluding to of investment adjusted flow be making in activity Excluding offset flow free of options capital of In $XX repurchase earnings due from core by EBITDA with we in

business keys is return One our of back and our to our to to the structure. flexible into cash invest capital ability shareholders

our nicely let against due tranche protect until our has funded debt Our currently debt which maturities been are attractive us up with of interest issued XXXX of rates fluctuations. fixed coming and next with all not

ratio would de-lever leverage X.X five range the in We to at of our and XXXX scheduled the to forma expect end ratio and due to a pro time and naturally beyond. Our continued we're times of earnings payments. growth in leverage expecting over amortization XXXX was times X.X

to another utilizing investing excess cash our followed In cash brand with priority sustaining flow attractive accordance our growth in light in our shares. of significant we we our number for and with dividend increase This dividend $X.XXX unchanged from policy, as XX% row. in announced repurchase to strong stated us in per allocation and dividend Wendy's and have is allocation capital strategy one by Our a capital dividend years our of dividend The increased of meaningful our seven recently a remains March payment. which growth, free now an increase is $X.XX starting share quarterly

are flow that the providing are free will XXXX in which new for replace $XXX that show growing morning global The to that cash Wendy's authorization. continues approved that we brand. March of systemwide expires a repurchase sales for this we authorization our goals announced also Today, We and new share current million has XXXX board

to $XX.X digital XXXX growth same-restaurant systemwide $XX.X development global on sales restaurants which and XXXX Activation tailwinds global expect includes Image in from We sales in investments billion our backdrop grow accelerated program. and from to billion our the of

in We XXXX. an of expect to increase earnings XXXX by will increase core compared a approximately capital flow growth, million our be to $XX is working improvements, primarily reduction expenditures. to capital free $XXX cash million This and in driven which slight

that is over hand growth cash of reminder, translating a restaurant which an with meaningful into company flow things to global and backdrop sales free showcasing being growth expansion same-restaurant significant As on sales I'll systemwide back Todd. the efficient generation. And that, is

Todd Penegor

GP. Thanks,

our by anniversary share As today's XXXX formal remarks Wendy's I brand. a close to I'm XXth revisiting way. the as excited marks that

to opened his investing bring of Dave a to Our when our deliver restaurant Dave serve never fresh way the mission, a opened clean and great on delivering he comfortable exceptional he in the environment. first food, it when order elevating quality did goal quality his just delicious to Wendy's must craft remain same we focused had on in and service, providing XXXX life, restaurant, and restaurants. Wendy's Thomas in first continues value, fast to hamburger frozen like In our the

the to through driving to to at digital operational life customers this We experience a great have will our experience enhance restaurants. of focus our and excellence ensure XXXX in all customer bring through

of and through It's continue franchisees. create remember that to re-imaging through love our provide a be and We our the access go program. to we able without important more place the the system global one plans any and support wouldn't will to around our development of world to is do this dedication customers family brand our to

brand open and joining brand. up I beloved I now striving they the world's day for will Q&A. and it With you over back know things the today. hand Thank we out, we that us the bring will before restaurant for Greg become toward day-in passion most to

Greg Lemenchick

Todd. Thanks,

transitioning replace our a two Abi of in to We're of them like Relations Manager news Relations, into the we of years organization in started, new Before as of about successful will Cutright will finance Investor role both March After excited roles. new I'd Lauren Manager for our share a their be as King Investor Lauren and get a team. in Relations. piece Investor

the calendar. Now IR on to

On planned First next Wednesday XX. in filing head and X, XX York GP, Roadshow is in our Las Sachs. I February and for the will Morgan and up Tuesday, XX, which City Stanley then Abi, Wednesday, on is March On XX, March Todd, the Abi, Goldman following Vegas. on to for a I do a the week of the attend the March Conference day will GP, New March be XXXX Boston in with UBS Morgan with XX-K Mid-Atlantic and J.P. will Conference we in region following the Roadshow

at side with contact analyst contact events at interested or any meeting post the of you're in these respective If equity sell sales please us firm.

strategic in today where and questions. We plan headquarters that, your provide Dublin, will Day host our we Ohio, take vision at Investor XX, an issue on a additional our also guidance. now announce summary to long-term With we're ready that to we Thursday, October of long-term

Operator

[Operator Instructions].

will Michael the King. question of with line from go first Please come C.L. ahead. Our Gallo

Michael Gallo

pickup you ratable morning. one, would you but benefits or be kind and of Thanks. across wondering for at would potential of the when should year. when those I then of I investments that order speak if a the the at will mobile wondering, all, benefits to to some speak going look to those enable. yes, assume perhaps you're what lumpy if positives, can I good kind questions and digital I we of of they'll was that GP, be start some Couple big you that's see of Todd kind be making, Hi, can was to investments? the we and of what help expect part And

Todd Penegor

part more to We news really be really complement Yes, a kitchen the digital a external And third-party we've operating going. making we with to we that's Laura of tools our thanks, we've the in make brought was is complement end made the gather take great from We're really progress. the see think and we few model place do doing. in to game future. growth And want in internally, and out We out these quarters to of full we tools we intensive. an partner, And Accenture to connection think We've the our benefits talent front complements talent the facing it. data if there, really investment throughout year, we a leverage the we into customization need the our you'll really restaurants, the have is we're move have playing start but have XXXX even you and faster. long telegraphed we At months be it us an in great better few day or back And and right. and this in of some Titus where a to accelerated who want got the back that show think great with a that we is really Mike. and and and those we're to those in demand have our this everything leveraging fold; about partnerships, I take initiatives, can is got Accenture. really a consumer to can less consumer create flexible but and go will customer got of to connection We the orders a what we've accelerate one-to-one that all lot order do we’ll that. of to want we capital

you'll talk about And sequencing some our that investments, GP and and of that. pacing in that the of to to see I'll over turn

Gunther Plosch

not million the side, XXXX. but on the going lumpy, Mike, little $XX to bit finance it's Yes, in to a investment going repeat be scanner is

our on million buckets we're we million all of out sitting the $XX expect with expense $XX investment to shifting So, source going to The if line. XXXX EBITDA going in XXXX at it's accelerated that's line, would about towards is a range coming the capital capital. and from reductions toward from disappear franchise Accenture of capital growth XXXX that the into be for down

Todd Penegor

running experience So, will scanner with really simpler Mike, throughput help and things then and of lot a helps out There them, lot information on is can accumulate even a is front, coupons with acceptance and way our the along us really the digital create consumer we could payment little great when for get accepting helps on a a up --the our benefits make drive to really crew so us over we It of paper to it better make time scanners time. right. the over sure it for digital.

Operator

come Markets. line will of Please from KeyBanc go Capital question the next ahead. Eric with Your Gonzalez

Eric Gonzalez

within share Last be comment the actually thanks. category in that category. made Obviously, case traffic change think the are for or was past QSR a is the seen other in the and but And share. category outside gain how year quarter. the you prepared the you our guess question about that you said then taking play results versus that out categories encroaching Hey Hamburger did that share traffic Poway, of in you also Did any is fourth territory? might that and brands how so. Thanks. I did -- your in the or I comments, that think Hamburger category. of we've sales Hamburger talk And I commented the of gained quarter, the that you there

Todd Penegor

Yes, thanks, Eric.

quarter share. If the quarter, fourth was Hamburger you XXth or our holding category in our of look it consecutive gaining traffic traffic at

bringing more in customers job doing So often. a more we're nice

bring one customers Our one to create do we we as and lot to opportunity trade the our last into up, how of had visit not calendar quarter a we have and our dollar continue we restaurants. only is continue do discussion them more the will but as more adjust we is how

a in dollar the made we've share Giant year, but and of pressure of we the from traffic trading moved into today, adjustments within bit the as market our X see we've category, you $X our So burger calendar on actually had for into JBC. moved up our in little folks our and the the in beginning we've this that $X

Crave to great trade into frozen fresh, our with the premium up hamburgers continue folks We Made tasting, to offerings with line-up. our never

and marketplace Chicken a we Bacon run the new all three had that, even into with Sandwich. nice before So with Maple hamburgers the out

good strong the consumer do but made feel we've of we for adjustments that we've to to low to all really connect us. model about drive restaurant in only make that really high economic balanced, sure that some got past we the like talked but not a we So, calendar we've

Eric Gonzalez

also And thanks. year stand, XXXX? what Activation. you system a lift on I you Image been next Hey could from in remodeled? of If sneak to expect you then percentage will has remodel us be maybe the one where update in on or Could

Todd Penegor

system got company we the Yes, look image got we activated. at now if activated Activation, XX% restaurants of image Image XX% and the of you

Our goal would have been to be at XX%.

ahead pacing that. we're So of

sure you As plans working Activation, builds, make to business that new investment return. pace in think we're joint all investments Image them technology, in get sequence decisions a we've to the about has got franchisee out the with the on and best

the about will to the that talk little returns, bit GP turn and that. investments over On I to a

Gunther Plosch

always out we investment. getting the unchanged. that payout We're level; the of depending talked about financial and which drive permanent lift investment attractive are Yes, to the that mid-single-digits returns high-single-digit are then lift returns and investments on

Operator

comes question ahead. the of Please line Oppenheimer. next Brian from with Your Bittner go

Brian Bittner

morning. are your if the digital, from benefit sales comps to what's you assumptions Good couple from assumption outlook into that, building appreciate around going are the that it. efforts, where they've since been of last quarters? about Thanks. talk could improve driving you I Thanks. In XXXX your any And

Todd Penegor

a get app we to bring really and and to we lot it offers and to to bring that life been sales and get and as then the life with investment. life sure some helping return support bring that any to to our into are question same-restaurant Yes, support our to opportunity first you the really of payment mobile start to we work we continue an advertise that Hard that together, about to for and that to to start benefit really have will acquisition sales building growth around digital. bring mobile ordering acceleration hear we've of as a all in done awareness the but see driving create make from more whole us but of mobile XXXX a XXXX same-restaurant not during course we good you'll some only a architecture strategy folks to what we'll we've trying in with see digital think

Operator

go Morgan line Stanley. of next ahead. Please Glass comes with John from Your question the

John Glass

on speed have will a construct, is could tracks out questions of and you your opportunity. if replaced. if the the market's Thanks declines that raise speed construct was that? it a still know going shows. strong the through data service very value $X in you suggest initiatives confidence would in did drive the support One with a there traffic of through and magazine in getting share to Wendy's slow much. don't XXXX squares in can Two speed what and a decline very results the of of Do is to There's is from build that at an do the $X up, orientation on you of X comps. in And keeping particularly mentioned you test are because you I when some drive bit for that you down that service there look it bundle secondly, service X what is are for if you what to price you But sort one speed how your that, what $X the XXXX and case? through quite

Todd Penegor

Yes.

our driver portfolio first on playing of is on a great So and on John the one nice role for is still X our $X a business.

to got customers and XXXX, to to in good JBC the that we it able was think to our $X during an folks JBC course and for up as the $X twice $X is we I Giant price news portfolio. saw of trade want those to of up from Giant $X trade continue we both opportunity the X point

of will speak last So within about. the sure making we external and got consistent We've during what simplification we've message going off of that slow our the that for the not that and sure speed And course unit of on work support consumer our menu technology that we're a make Managers, system down are reports in then our multi with really complement premium order for got got because about throughput we've kitchen. we've that. restaurants how we great around all operators. measurement architecture that that lot the we timing get comfortable On to orders with also got we with approach did we to with barbell, folks it's laddered initiatives on got facing we training We're talked going we are, just restaurants. a on tools and easy sure really as making everything more into also do we year. only it create service, as position opportunity General And continue to price as updated the focus that it the talked make tracking part and of and have. then back and to a out the into strong is an And

to as calendar going it continue And focal team that we're with a we improve of very is underway, the year. our confident I'm initiatives operations into lot So we've point this to us. and a for got of leadership go service speed

John Glass

and excluding XXXX how we we sort least one-time about G&A comp one just XXXX? think over question those about do the G&A time flattish then expense. GP at this for modeling at longer through look got XXXX, we beyond Can reset of do a or you, think you've And now of how period

Gunther Plosch

the so us. that We in want made international in stay is both one an be digital we specific totally say number savings way on of G&A think priority why of first to to in on enabling about investments all growth, is track. going we initiative company, the John, but is focused efficient kind Hey and We're growth G&A definitely I on for guidance the base. is to didn't the give our G&A

to We X.X% we communicated. bit committed get want than are sales little cost of be to don't provider. longer again lowest system the previously to definitely And

us second We spot an peer and the G&A group with have in are the company. the efficient currently that that's quarter for we growth the think be right in we to

Operator

line comes question Bartlett next Please Jake with from ahead. Your go of SunTrust. the

Jake Bartlett

clarification a of and Great. I couple a just then had first quick questions. quick

think positive you are you Todd, clarification, the has of I about that or case? I and to more kind in XXXX? the whether wanted was clarify people talked traffic On coming that's been saying positive just

Todd Penegor

Yes, Jake.

So Hamburger we our are look you flat. category, look in traffic if it if share. on But were at full-year, the down And growing category at traffic you Hamburger slightly. QX, was we a

our chicken bit one and is So of concepts bit player seeing little stealing category make comments sure and big the has total grown to it and of those our seeing that share, back who the that share in the those some really stealing the calendar you're than little we'll Hamburger our earlier and a of sure they're can we opportunities experience customers Mexican in are well that softer over to to continue And actually you're the make bring that a QSR. complements understand service into we brand. why

Jake Bartlett

wondering to X.X% on I which guidance your the to in you've run implies more especially And same-store years they've JBC Giant is effective. the few But responding talked your think consumers first XXXX. of $X in in you past Made quarter the about sounds better Crave. promotions, kind premium Got here given And in promotions X.XX% ears to deaf with it like that what whether on proving sales It I'm fallen about also the the that it. then largely sounds seeing consumers. like you're

so in sales? systemwide So of your whether kind instance really X% And XXXX X% growth cadence about I’m strategies the just results unit I I growth seeing then of wondering for the if systemwide just of kind or look Made same-store I'm out pretty indication growth continued whether there reacceleration that's or sales out kind a it longer-term shift of reflexive tailwind to by whether sales baking you're encouraged a in and we're lastly, wondering guidance, a to you're for implies there. at from of Crave an that believe the materially maybe that's and promotional

Todd Penegor

expectations and Sandwich adjustments our good, that Jake, it premium the on on had I'll to with quarter turned we the we we the start the quarter, the as we felt side Yes, made which really in Giant Bacon so JBC. on performed calendar, we fourth the Maple finished Chicken

on look two-year so two-year our acceleration the quarter, our see throughout And an at December did we you comps comps. in

balance our bring but to are up. we've calendar about. to and really strategy it's really we're we that growth finish folks And we innovations dealing increase also need bring that want on our to trade we the also working one to innovation more about good traffic we folks the in comment and I continue it in we've but made do positive been more but first talking where was strategy really continue and that one with more into make with What sure year. driving landscape that around are the So protect that and quarter on restaurants our them to share do life to competitive get smart often messaging and premium really and bringing is. to is that evolve the to and our core don't adjustments life feel the dollar consumer we visit, to the smarter feeling where

about good little it feeling turn I'll talk that. sales. I'm GP a systemwide So the to bit about over to

Gunther Plosch

an XXXX is is by system what XXXX There's by, it's by and a acceleration a observation between we're On hopefully right. little XXXX assumed acceleration of Jake. bit SRS momentum. definitely driven little your driven since it digital sales, Hey, building bit

XXXX. and acceleration The other XXXX assumption is between clearly you need

XXrd So the XXXX, drivers two don't in the third week. have one, forget that's first we and

get that slightly also So outside helps growth. us

Operator

will Please question line the with Francfort Bank from America. Gregory of next go of come Our ahead.

Gregory Francfort

traffic guys check of on large check I traffic is competitors have basis Hey do then where you that, and price know was be that, a lot follow-up going running QSR questions. on guys on One to just was and to X% should how growth was other in should How be? and way. you with We're but a competitive or X% traffic the got do maybe your about And of guys, clearly that right What I think I SKU measure menu a and value. will or between where count that John's your you disclosing is go-forward balance disclosing aren't it item have balance maybe that mix strategy a question seeing two question just think competitors, other they've of think be? versus check one landscape do my one large and simplification. you the negative

Todd Penegor

Yes.

really of is So items number That's are premium the like complexity in measuring that do isn't our we Made the restaurants? really new offerings why It's we menu as position easy build. these our What bring we their to the just restaurant. Hamburgers where folks. Crave on into simplification to line-up,

it really as build complexity we little a throughput up SKUs. for our leveraging employees training of variety we change build of success we training the the and to make had that tasting good gets ease we premium though menu the still our that sure quickly set we we'll support that for our can even great ease to lot on have that and of initiatives. SKUs create tools for and at consumer. up So the down is continue the look really we to a of and there sandwiches right boards, the our make sure restaurant are It But number and people always

aired Hamburger we've side winning to, folks and about traffic bringing share really in think value restaurant. starting strong been and category traffic bringing we spot you really really we've the from of you the on a into If in go landscape if feel good because about and our

traffic drive And bit and us some sure course opportunity that lapping evolve balance. to in the want mix really we've probably that price We the and got little where to been we base. our declines make this see XXXX. more and into going where have of balance look and years in mix may we you'll that's little So a over last but a gives more year of a during a the slight little couple of we

Operator

Matthew of Your DiFrisco next ahead. Please question comes from the go Securities. line with Guggenheim

Matthew DiFrisco

you. Thank

comparatively And how a a to was us the I that's maybe how estimate. I'm grown or contributor this if Sorry much comps year-over-year curious stands but give sort of disclose now? just in the for you system delivery guys ballpark as did and can missed you where that

Gunther Plosch

Hi, Matt.

expectations. our happy progress making exceeding we're with delivery. definitely really are It on We the

and so progress. a the this great, end by We have XX% to great we coverage to expect XXXX XX% XXXX of about by grow of about

generates to We in much today's how terms We're orders size favorably obviously tailwind it of customer waiting of high. with twice satisfaction of we not are check actually both also us that happy perception obviously and for view. check, are X.X sizes are the of regular disclosed watching we point and and very we in watching and have value really in delivered instances a

Matthew DiFrisco

margin maybe though bit little with related expenses commission offset also side with that? the a Is some it the the restaurant pressure or is within on there

Gunther Plosch

consumers model with that's the fairly delivery our of literally chosen in on Great so costs, we've question. all the fees to and actually the on Not service that the passed the DoorDash, are passing are fees reason watching satisfaction case, the perception got closely customer that right why especially value we visitors. that sure in again minds we and and to are make the we

Todd Penegor

balance is impact is And to on delivery. with of now and awareness small our drive between consumer our the on very That's the look in a brand, lot got we've drive our And proposition. a good still our continue percentage is to still know a do opportunity and feel why a really, lot of is it's our low support incrementality a yet to comps. continue biggest But more to we the awareness delivery, the is providing we our on system have continue got competitor see to delivery model learn to at economic food in access economic to to the good what meaningful at support model. business. you reach complementing but home we right awareness, Matt, more still don't restaurants We've and restaurant of

Matthew DiFrisco

correlation for DoorDash person? the try through test way perhaps DoorDash going of the and driver some on the a the maybe drivers or a through? mitigate that drive there slowdown the windows speed to service, with there the Is maybe Is dedicated

Todd Penegor

look have There's impacted little Okay. bit. speed out a faster get and partner and the through easier restaurants to where impact. meaningful that to that make how the ultimate make Clearly could no, there's ultimately had dasher and into always But better sure get little at more do our consumer general, goal lines we a our faster DoorDash, is. and opportunities out in them we'll that how to figure the spread we what continue But it a with often. orders food we system really it's to restaurant through to get for do of get ultimately pockets the get we how that's dasher

Operator

Your next the question comes Bernstein Barclays. line from go of Jeffrey with Please ahead.

Jeffrey Bernstein

size Great. up what quick challenged Todd, late, positive sentiment it's modestly under Thank your presumably and across seems been the this you Two questions. franchise you I but profitability just it pressure. industry if know very you One, like returned is can comp think service of wondering much. quarter

the getting I for remodels, lateral So I'm just have And then kind whether implications from ongoing maybe future what it's feel follow-up. or franchisees wondering growth unit of you're one from franchisees?

Todd Penegor

great relationship a got community We've the franchise Jeff, past. strong talking and with we've our partnering them. and lot a talked spend in and with of about this we time

operationally. sure And week we've Advisory to Council our Advertising with on innovation got them a that that our promotional Fund committee restaurants work Wendy's buy-in. and their have support with and sure they're work we're We We our partnering have with to National about basis putting a councils. calendar really meet we calendar, us on we the with to make and make tech this regular Franchise things comfortable feel regularly into

good bring open so lines we've technology life got in that restaurants, So the we as to feel we of communication.

be follow of what economic get we've big rally would is execute But we Hamburgers them great data Made pressure. margin fresh back. a stomach items and those would to got got from make perspective, we to and I where anytime, from make an But American and start XXXX. with tasting their at behind our for are yet their system largely consumer has accumulated we Wendy's into to that's folks know great look haven't to you of Crave, they about we pocket try all they still to food profit know never profitability opportunities hard that but sure As tasting the stretched feeling they're company really our we drive North that like frozen going to sure

need we why that's balanced basis. calendar high-low a on So a regular

Jeffrey Bernstein

kind on know missed I strategy. is full just for the know that then guess October your goal unit international strategy international, XX you openings higher would volume update of read the and any this And of I XXXX on Are that but of or markets of My thinking core Any kind the get review great. accelerating in talked that whether Understood. early on I guess about you unit you in thoughts growth and an you it's of doing units. mentioned a around year still kind be meaningfully about we'll XXXX? review the fewer

Todd Penegor

Yes.

thunder. about want So still a steal thoughts way Jeff, just, lot few in under October. to Abigail and of and let a a I will me give it work you got don't talk lot We've

to now growth. the structures. and XXXX tools optimization, those solutions, differently As really incentive we're business, restaurant partners utilize we prepared franchisees into to under the we recruiting from ideal thoughts, remarks Abigail even new on the about but and transition is we've build that great to had When On of accelerated that stronger we've we're think at to leadership of set markets. And up will new you encouraged to got of the foundation opportunity structures, a ourselves accelerate did think going design markets different a relook ton about take great North couple of system have there coming on playbook. we that the XXXX, we a the profile the franchisees franchise growth couple American going the talked during that for across a think of the globe we're to

on but master to So going we in internationally. we're still we to asset-light a really really so Abigail we'll joint in toolbox like Where things to But bring as franchising and full the focus. be look we bring at do private October? ventures, that in that help believe let to will reminder, equity do our us want an look we'll life want to model internationally some at and go

Operator

Your of next line with from ahead. go Please comes Research. question Stump Alton Longbow the

Alton Stump

back course your Good performance over you of of hard to morning, think that the just I impact, sure the I'm I thanks my this ask How the XXXX? out, taking environment of it but as and for pertains to comp much to much guess do on had going competitive question. service. wanted speed is to how an place

Todd Penegor

service, at it. and of speed But sales. correlation about Yes, we all clearly taking when because to think know a that service if we at speed I out you parts won't lunch, busiest internally. there our there's day it look down number driving of see put you

a If somewhere with to line, else. a that long pass and line to head you got you're long restaurant going

little those to to frequency opportunity lines So do wants is drive move back our consistent those day lines move we can the make trust sure so and come how that a in How we restaurants. and consumer day earn really our fast. did more out, who of that

really in up better. speed And overall satisfaction even speed with an we matters in We still peer in customer the not measure we enhance speak rotation that and experience. in spirit tools and a we're the of as spot of we are to of there in on It's but have we that's that we've the overall to our And top a place to and that the relative in elements know regular bad we're know do training groups we basis. So the experience. the opportunity start. why one that put

Alton Stump

desire, at where the one the kind Kind getting Has thinking to if and I'll back And quarters they're Image more last Activation it's they their just question been any and/or the of back not last slowed as That six have build thanks the couple new queue. or was in impact hop there and in months? what's helpful, to about I moment. of of as stores comps whether far that could are franchisee happened Todd. concerned

Todd Penegor

the the community perspective economic is and profitability look you model a where the we restaurant we're know thread system. for for franchise great strong and be working continue growth why going drive to for company and sales it's lengths the it's working the going our to common system them, that's from to got if because Well growth profitable to across we're whole to at with always sales

year American half well having business, our little of on pressure back With the bit I XXXX an a margin, from on a incentive In challenging to don't Development and re-image XXXX. of New on America, got great the perspective North we've groundbreaker top-line North pipeline see our a into received. business. The has that really impact even we're continuing been into

support the announcements So on them we new development are incremental we're today. the up and the helping along technology front to way agreements with signing make we

is it a balance. good So

we to late international restaurants them. near-term, to IA bring of one our afternoon we're part, growth day in help still we We digital All still do And excited frequency, as been ultimately then look and then folks day And we've loyalty, we even over tools more our got mixed right. parts, driving re-image, got continue role of a got check. behind certain We've visit, night how that more XX% if system Right, in dollar, We into bring at an tools. will and our to so more tailwind. often. will play the and us underutilized in opportunities the a know we've that about know we're you creating experience only one opportunities throughput, growth more are those part service day got time and life. consistent

lot us of So there's as still of brand. growth great in a Wendy’s The front opportunities

Operator

comes line Farmer of Jeff question ahead. from go Haskett. next the Your Gordon Please with

Jeff Farmer

you. Thank

decision for what a consumer as to that any and question promotion guys that and see of promotion? what Just on you that a drove to extend type the quick question response dollar size with follow-up,

Gunther Plosch

was overcome of saw all view. enough any finance traffic consumer not We Jeff, criteria and our this Hey size but dollar point make our the view, operations profitable. promotion to we totally always in encased of basically X point promotion past a traffic, view, of totally from point and

probably we we it that one main why for was in. guidance the So rest the it missed of environment, probably year. challenge operating slightly function a our drivers competitive the also the And was it of that's had and was with margin of

Jeff Farmer

That’s I GP, XXXX. million just the on think $XXX number that $XXX number on components it that acknowledge cash components helpful. granular little XXXX And with then to us $XXX I as expected in any in that color of you that you touched million bit bridge you've of color you million free the more to from touching a to provide million to bridge but sticking the would it's the can XXXX? $XXX Again in

Gunther Plosch

drivers, there are right. really main two Yes,

growth high-single-digit right. earnings all, of First core

two scanner you of to $XX one-time the growth then investment for very working the a combination is So starting side in slightly are there still capital initiatives going million. year so to XXXX that as capital we're on don't less give are high forget the well. going earnings The small a there, that to the main about driver those into expenditures is we're drivers our down planning bleed we this and good reduction will

those the $XXX hit that million. three combination confidence So of to us give

Operator

question next line the ahead. comes go Bernstein. of Your from Please Sara with Senatore

Sara Senatore

the Thank on please addressed. you. I of two have already follow-up topics some questions

help should when we on offset least industry that first investment translate into at thoughts extent it's your is sales not the same-store other they evident of that the digital now to headwinds. or accelerate just any comps. that digital look across I the The that is guess and

on to any driver. investing I that question than some different restaurant is and largely now that but you question, addressed. So profitability And peers opposed table is a cop there have margins stakes think my just as reason guess franchisee the level you seems to my might then that a other to as of be experience other

little a systemwide than was are the comps the wondering obviously And be better Is better taking there So this softer? interpret at them of stores price on context maybe stacked price. may that's is a in margins are sense look bit what a little trying traffic Our margins doing? how more company their franchisee to related where sort just I bit to but Thanks. to franchisee the that is any trade-off profitability understand actually basis that if operated company true, margins point. of

Todd Penegor

model customization But the start operating where accurate it and stands can I'll model on differentiator. get are arena, actually only take not with Sara. faster can the to make think be about if operating we as our and can any in big digital we fast technology over Yes, restaurant we full you margins. people out orders turn a but the and that because order, Wendy digital a GP complements well as

where our everybody and us restaurants win is frequency battle going to to into the stomach best really to but the for in having technology biggest and You're is of is, opportunity who drive category right our opportunity to that more be flat experience. a does slightly That's share creates best the that's it customer that up.

drive better service think we as do back a we day with create lot to more comes day can technology speed. them better connect that So that in frequency a consumer and to and of that experience consistent out and

those to to to orders have figure If back. they’re get into out on and come they're I'll going faster, to faster a the GP continue over can and it restaurant way you the to get to great turn margin. want going folks through experience kitchen a

Gunther Plosch

margins. restaurant points and paper, and basis versus the Sara in about the occupancy. were Hey about XX XXX we XX basis basis points food year prior points Right down basis on year on on points on labor about XX

because So don't and insurance forget I on with compare were three line labor us was be quarter labor tighter things us, little side are the They will hit two it systemwide costs, franchisees guys and with side the say in on little better, maybe and us. quarter to than it will food hopefully a the about and bit hitting holding will side side would not will paper labor bit higher of back definitely we occupancy them. do better the

than conclusion done think So out should a that. bit have overall that little I better a there there is franchisees

Operator

question go of from ahead. line the Your next O'Cull comes with Please Chris Stifel.

Chris O'Cull

the of market franchisees Thanks. slower Todd, may struggling the stores service? tight speed concerned their be of which staff in could be the you labor cause that are to

Todd Penegor

tools environments for General to us we get training but staffing restaurants. of a do How but have How is coming got speed talent that setting feel valued us. folks of where full speed and on talent? in environment one we're get Chris, how to of that Because quality create and that staffs is may lot incumbent Managers on that's and and basis. our we've have little in us on bit have throughput reliable do enough a success. a make and all create sure great could things the you of a that up folks people a not Yes, the regular That providing you create and make appreciated can that you do the for challenge great GMs sure great impact

continue So got and recruit we to to day full service one into and we we continue practices. good all and to talent it best out. our sure But really just experience day that in to those the make leverage in is got share to complement bring restaurants

Chris O'Cull

of locations? get the you or track staffing value the able and satisfaction around at stores service Are franchise at to speed maybe franchise levels

Todd Penegor

we've the all overall system. in overall Yes, satisfaction elements the of got satisfaction whole across

and a we team got get cause. good are we've partner work our So root to our franchise and can sense really with and where opportunities

news for? But what brand, within do what's Sometimes times connect because are is the great really other level averages. have metrics than on retain work How we our if stand our that then that do the can restaurant, General or could really be that our below continue got staffing, to a they next-generation we team may some The we turnover. within core retain other we the that to of employment can you be Manager foundational restaurant. manage employee? make sure they're teams industry that opportunities better at of you to And good that core whether turnover

So even employees. and we start opportunity even how our good spot experience further for that to enhance is a our from

Chris O'Cull

will technology level should of the certain a one. then cycle I mean or ongoing of think growth about How just is be should we we something rate last the And Thanks. going just that this remodel kind of forward? expect investments? one like lumpy

Gunther Plosch

that necessity while we level compete Todd the I right. is us. The mean should digital model, be for one-time here in of previously, But are multi-year operating going our a it's investments loaded. marketplace, said said a have in as to engagement as advantage a it Accenture with it stay the customization to previously front-end away. with engagement to go lumpy is The I is investment competitive is high

down XXXX in our capital about So also we fact by take confidence staying to that the that points while digital $XX can the to million space. competitive

Operator

ahead. Stephens, question next Please comes Slabaugh the Inc. from with of go Will Your line

Hugh Gooding

your power Hugh Yes, to seen taking category. any QSR for broader have on for we've some is from one heard thanks marketing co-ops you morning. of this peers my business and Will question. This Geographically, from turning impact some your for then also local

couple day Some innovating in of XXXX? how day your at going of last that peers part around out quarters. looking the you're on just that breakfast in potentially for parts I'm Thanks. curious

Todd Penegor

pockets think by competitive differences. don't really the that's regional see driven do I we Yes, of support.

just lot huge growth driven think in and But level. a of regions. a region sales not to from from the delta same-restaurant those it's region, more I consumers economics a that's by the

at continue the to focused for that feel breakfast spend business and that opportunities as dinner a us to lot at know, want Hugh. in part. know some that We've good that we restaurants to about are as that extent I in the got others really and XXX don't about So you on see we Breakfast don't play breakfast that creates that. if day lunch we'll part that, be day you

Operator

go line comes question the next of with John from Your J.P. Please ahead. Ivankoe Morgan.

John Ivankoe

the just related fiscal of you're clarification million Is to $XX as first in Hi, that XXXX a consulting technology that part that spend CapEx? correct? that's being of spending capitalized

Gunther Plosch

capital of yes, our to part $XX of John, right. Hi, $XX million. guidance It's million you're

for have the $XX guidance We that digested in million Accenture.

John Ivankoe

the And of million if very CapEx guidance talk about we fiscal nature that Okay. in of maybe important can could for but some I context activated. the understand One down Obviously spend are actually opposed we as high? major generation might to buckets that could if of company million ask perceived remodel assume million being that correctly. in obviously out as that flow longer-term cash talk some XXXX. terms to I relatively that Company and of $XX in might about of kind a question number is some the more million implied that I XX%, down cost actually to that generate image short-term in like currently of your $XX $XX of that's be restaurants by be restaurants $XX nature was in continuing but to wrote hoping and go for years free might the

Gunther Plosch

side restaurants of spending Image million. fund and capital Yes, capital. and about new the be And four for perspective maintenance capital, is capital on my IT bucket capital by company XXXX, John, again corporate we you're $XX should to be development Activation, right. our There basically builds will that capital, down

and $XX to So front-end from I contract how $XX it is down so million the do beforehand, slightly the it's pointed we also you to helping get lower, to us reduce of activation loaded, basically high million percentages as our as And is, helping spending range said to out, Accenture down. have we all this XXXX. obviously so image between capital XXXX already that is get us

John Ivankoe

Okay.

fiscal that $X $XX to So not could $XX I for is million, versus spending I Maybe $XX clarify want in million million reduction the to XXXX it will target but misheard CapEx be million. that clarify $XX that XXXX? million you

Gunther Plosch

Yes, can million. $XX it confirm I this, is

Operator

go the with from question Please Strelzik comes BMO Your Andrew next ahead. of line Capital Markets.

Andrew Strelzik

morning. good Hey

kind the the in it. So assess in know was And an look reflect on XXXX, I decision pace wondering reduction innovation. there how significant ramp there, up Made you in as a to I you that relative intentional would of I'm when back at XXXX? significant to maybe or of innovation the that what and that menu there terms the to either pace happened Crave in desire seems Is pretty in to of innovation XXXX.

Todd Penegor

we never American the emulate to if had a around really on our awareness others beef us model. Yes, as you fresh frozen think about focus driving with business wanted XXXX, North

three We've procedures we the with melted of that the done make all offering. to good to and core really our foundation and about juicier opportunity now, good and restaurant folks more a we've be and innovation continue overly felt Made operational improve the and we back restaurants quality smart up. core -- complex doesn't hamburgers And to our driving Crave, Hamburgers. to some and and to around create cheese make got do got elevating within about those. And feel an drive like innovation line-up roots really but that complex our hotter new to of strong overly do, things we've excitement So our come with

So you've that power comes created some goes some than rather stuff variety that pretty staying and has that quickly.

that could we us a be for the future. that So into platform good feel

Operator

with question Holthouse Sachs. next of Goldman Please from Your the comes Karen go line ahead.

Karen Holthouse

on guidance into that question G&A we as guidance just of got view. a that year versus X.X%. just the and growth I the the system math percent If Hi, and next on system sales like of G&A get the X.X% we and a then originally then longer-term sales tying do G&A dollars at

are just for franchisee You've -- still is Is included G&A? million cost CapEx and hitting X.X% talked expense. view? anything right one-time also some expenses X.X% in $XX the there or of the trying to the Accenture of discrete hitting I kind from that bridge And longer-term that about that within was line

Gunther Plosch

is Hi about Karen, your math right.

So as that on that we XXXX. X.X% with number it's compared is are obviously the guidance for us and sitting ahead to

comp are what the puts million. takes there. we in and The is the take and incentive $X puts So obviously to had of refund about

grow. year-over-year obviously G&A want can we're we it's of of leg and of to that incremental that to that carryover digital we line offsetting savings initiatives million the filed in with And between way had sort then we of headwind of previously. our the million about reinvestment the it's final a restructuring G&A out have $XX to million in, $X make We and about grow sure international $X permanent, it's and here stay

had don't G&A a don't wanted we long-term So little than and we said, are definitely a sales is originally on have bullish anticipated. which do of to that as bit function grown percent as metrics a we want of system growth our now prospects. hurt our us thought. little our be a behind we sales we bit It's cut Seems I less what to then what to for outlook

target later. might there X.X% know is get we a we little our bit So

Operator

Please BTIG. Your of Peter from the next line question go comes with Saleh ahead.

Peter Saleh

Great, I the want and delivery thank to conversation around you. back just come digital. to

the are delivery or seeing is side, the in guys delivery seeing you're the predominantly repeat from On you for data visits customers of trial what time? first

Todd Penegor

advertising providers create Clearly support even the trying for some have awareness some got compelling and we've the we're of see of We're the the trial, with and and those been awareness delivery. news create repeat folks now. a our It's are advertising in are is the good. seeing awareness. things are they're that we create with that create to awareness We delivery good some and own some aware funding great economic partners nice brands of model creating their to for partnership

XXXX, so we system as really, XXXX end Wendy's even we same. awareness, being opportunity get is our know the they continue our out during folks and Our we XX% drive the more will able how build XX% as earlier, to advertise do delivery and more or can do of at of nationally locally it's to said And support that to awareness. delivery can from I whether create from partners

Peter Saleh

funds you So towards delivery -- associated will allocating your terms be more the with increasing of advertising funds advertising in capability? that year or this

Todd Penegor

you've some smart during XXXX, they funds. a lot around done to them. our efficiently what tagging seen we've continue events home, that their that they think we've can And are use have to sure at what in consumers of key I we've actually we'll key delivered been know when And been food do partners made our are with and some they fund we delivery our some for at to sure to make some smart we've when things when partnerships repeat. people create can of the and excitement try they home folks delivery to expense experience great a in events where during have prior around

Gunther Plosch

nice actually well. happy own to to also our is started increase really their and awareness to that are to that it's advertise featuring we advertising -- brand their DoorDash see themselves create as And brand in

Peter Saleh

Where more adopting on interested in stand think testing you are Are lastly, out do XXXX this? just you franchisees? the then And roll Great. in kiosks to guys this in planning they kiosk you were some stores. I implementation, to

Gunther Plosch

going we Hi, than always slower planned. yes, kiosk is as said

I part slower right. digitally we our think important it's an thought, than but it's consumers surrounding

really to So of we restaurants, put trying XX% money in our it we’re is. mouth our our have where

prove business to So there. is the the case, are case trying business we

You get get enhancements a slightly throughput slower labor busy growth, day parts, get the to higher parts take revenue check you in busy, in day you and sizes, chance you out. get

excitement a So it within up as to to to accelerate franchisor investments franchise out, prove the then pays hopefully it's community. the us our

Todd Penegor

Yes, XX%, have so in that's just the XX% that. we restaurants company

leading we labor for strategy. really mobile we do and it we’re it's ordering all And we're educate a right the the again a that's of for may be have to role not part the system prove There's doing. benefits do and other lot positioning. as of as but the learning the all things consumer? that How place we trade down So a areas well feel in compliment kiosk digital the to to and that whole it comes

Operator

line next ahead. with the Your comes Geiger Dennis UBS. of Please from go question

Dennis Geiger

Great, give looks thanks. on pipeline could unit any Wondering you comments currently, development agreements the if like. what multi-year

the I given Japan, there's conversions going or any commitments just are about of either in And to cadences separately of if First stands commitments way there's the of that past just locked think Kitchen update can the give in then kind wondering and any percent if number where on you that think you in? forward? Thanks. the

Gunther Plosch

Hi, Dennis.

and that a global agreement. XX% led really been we've agreement, that above basis franchisees development agreements and incentive it On the made is development groundbreaking development for and incremental news via with agreements On had progress about committed over is to the committed our exciting great definitely previously. plus secured

good progression. On our with making progress the are we First side, Kitchen

a have with converted Kitchen them plans we XXXX. about further of think First do that bit third little obviously in in restaurants of north of Japan, I to

Operator

of ahead. will the Wells go with line Your from next Jon question come Fargo. Tower Please

Jon Tower

roughly to on on perhaps users. questions, want on Awesome. you've next know mobile think how I few strategy should shortfall. next about that talked forward, The XX% is year couple, How so know couple historically XXXX; XXX registered pacing over we still around first flips Great, and was thanks. year, just this Activations I XXX numbers over should acquisition the the it a think app you. you've on We've the downloads years? we a the can exhausted Image targeted I store couple years. going that And then doing put you about Thank franchise of by your quite about track? some next about of hit

Todd Penegor

we externally. track that a we're are, users internally going provide where really so to active do Yes, metric it's our not

in. the really driving them and keeping is acquisition job about Our

them So it's to our stay to on at third-party in, really them based to them competitive about active it users external really and and get get to use look get continue in we'll benchmarking app there, we where guess XXXX, probably we'll XX%. a as see are On of we in we we stand. ended that would growth understand continued and I pace XX% since Image end up will to Activation, ahead

XXXX. opportunity more close customers XX% the more bullish XXXX. we So and and XXX often. get time to to franchise on of flips, we're to re-imaged get to good during And see still Good ballpark feeling in to return we'll optimistic continue probably franchise that flips good bring investment, the XXX of in we'll by the course

would we also activity goes get is with transactions You in. actively involved remember that franchise-to-franchise there other on that

it franchise to we're restaurants what and other balance ensure the of folks help deals. change And stronger have get interest of so one we because do we was that about only can get during we year but where many a that to flips the and that many last these then some is and course have involved that involved our hands So had of system right -- to franchise the had actively activity community the you we there that is so saw in from XXX work on our have future. in would of our teams year, building XX all for help

Operator

Bob question come Please with ahead. the will final Group. line go Advisory Your Telsey from Derrington of

Bob Derrington

GP, same-store some given the program typically sales. to you've you. Activation from color thank Image us Yes, the contribution about

America this much of Activation system sales, Image North same-store program? were For got would a X.X%. -- to that sales system follow-up. up I've attribute you How year, And last the

Gunther Plosch

was tailwind Activation the Image basis from XX points. Bog, Hey about

Bob Derrington

market, And, approximately that customers Wendy's local you XX prices retail through typically I one the XX% any your higher What the basis kind either stores up that I'm price points? marked thing your retail the get terrific. ordering as DoorDash in price? are feedback from typically to Okay, or here XX%. wondering Todd, look at do store of versus about

Todd Penegor

have look and it. get and a to model, profit to don't business big we From good. they and behind restaurant watch Yes, haven't big adverse excited continue the is so level, seen at get very impacts, that's to why a a to any not taking consumer they're incremental consumer from any for support because feedback we get and them economic a This perspective truly incremental and restaurant they we'll margins, feel right it impact hit which right.

about in still X.X rating we their through The restaurant you highest delivered both consistently DoorDash, satisfaction satisfaction overall our on is order. takeaway the X and If we a X.X, overall in satisfaction and our drive track think out on overall delivery, scales. ratings of

food we're good -- the hot. overall the experience. consumer getting there to and they So fast that we're about getting feel And

satisfied. still So for that the the right highly and that us good that sure it's the make for we're feeling long-term got consumer balance is we've to healthy

So we'll to watch continue it.

Bob Derrington

beginning thing to part just that no is store as free higher is generally service and get? consumers that you such are delivery in versus understand the they a there paying price think So of the retail

Todd Penegor

right, continues convenience exactly you're the I At redefined of day be the Yes, to right. Bob. end think

little home delivered We how is at And that to take convenience mile they they continue really biggest convenience folks and pressure said I now food our with for bit because a through, economic fast to as our that there that's get to is cost drive but house traditional earlier competitor. that it some it. does know drive food not do the to when is price want that going you them a want lot having hot food they to last free. and get And of your

access good that more provide brand. can we the if way that's a thing So for

Greg Lemenchick

Thank last Bob. GP on thank you, and next great look with when call. Have quarter of for you participating day. report results. morning. question Todd everyone our a and quarter you, was forward you Thank again We first speaking That to we the our this

disconnect. now You may

The Wendy's Company (WEN) 21 Feb 192018 Q4 Earnings call transcript