WEN - Earnings call transcript Q4 2024

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Operator

Good morning. Welcome to The Wendy's Company Earnings Results Conference Call. [Operator Instructions]. Thank you.

You may begin your conference.

Aaron Broholm

you year our earnings thank quarter XXXX and full and conference morning, for fiscal joining fourth Good call. Ken business After President this quarter and and results a financial our our capital and Tanner, Financial then update outlook Chief Executive and will brief Officer, will fourth introduction, review Cook Chief Kirk allocation XXXX Officer, share provide priorities. open questions. From for line there, up we the will

website, which call is a available ir.wendys.com. and Investor our conference Today's presentation, Relations webcast on includes

set of investors the our the reconciliations from measures. today measures results non-GAAP note non-GAAP reference results or harbor information we forth our materially comments statement earnings and at take of this Before and release. current begin, of our discuss appears forward-looking safe end financial to in plans our some future and release. at most performance. differ that please cause comparable reflects the today's presentation to we statements. about of forward-looking today's earnings is This refer in GAAP that Also, Various to those today's measure directly the will expectations end the affect financial Investors should of factors disclosure reminds projections certain could

conference today's will to Kirk. following questions please the have call you contact me. I call, hand If now over

Kirk Tanner

then quarter to you, and in highlight deliver I'll we updated and our EBITDA fourth our progress growth everyone. underway and good for I'm morning, results going in capital Thank of sales the Aaron, and the share some discussing to XXXX. start allocation by made initiatives policy and XXXX

am including celebrating by patty shared favorite what increased earnings with our Paramount, fan dollar led growth with success global size. supported line in last apart strong sales expectations our SpongeBob's collaboration this and showcasing QSR and category. pleased nearly the Wendy's the traffic you innovation I its the sales approach partnerships, our crabby a marketing and over in At same-restaurant over X% to drove capabilities. burger our core on XXth check, sales of with anniversary. grew X%. report U.S., lift This were we outpaced that great same was restaurant system-wide call. Growth offerings, results traffic QX In of Our our double an with on by to example sets increased average with XX% peak, and a impressive execution was our typical an the

in contributor to innovative up on Cheeseburger. basis and Growth Carmel net quarter achieved sales prior to including Internationally, strong led Frosty we compared limited-time constant growth. a Bacon the our to XX% growth system-wide be by Mushroom a with unit U.S. continued year. by strong growth the supported daypart morning was Salted X% sales also offerings, currency The over

increase basis gain generate Global was and customer the enhance from member a ago. up which valuable more digital customers. year-over-year, to our to from experience year XX% XX% XX% prior continue to quarter strategy loyalty in-app points insights, and which offers we sales to our Digital grew for with XXX grew growth momentum relevant nearly the We mix, globally. This use provide

over have in XX this now system opening XXX by our members to continue enrolled fourth We new program. We scale strengthened million the reward footprint quarter. and restaurants

the close on delivered we addition, restaurants. announced In initiatives to quarter we underperforming last

driven growth consecutive growth. sales results. of global our technology, year XXXX our on year to We by achieving full and breakfast, full XXth innovation delivered Moving year sales same-restaurant

growth profit expansion. delivered we margin level Additionally, restaurant and

sales billion, growth system-wide we across the globe. opened XXX X% prior year. $XX.X over reached compared Importantly, reflecting the restaurants also to Total new

QSR traffic burger or every maintained share the business growth The sales same-restaurant grew in quarter. X.X% U.S. and delivered in we category and dollar

returned and free over same-restaurant sales $XXX and performance and Our to we through drove million and This X.X%. flow grew international X% EBITDA sales shareholders system-wide sales adjusted share overall growth, dividends grew repurchases. cash

For was and by QSR This burger the X%, category. over outpaced grew the awareness breakfast our impactful increased sales innovation. driven which year, full

Nuggs Our items, innovation our extended Saucy menu expanded offerings. chicken beyond the breakfast daypart that series of with our a including new

featured each our season resonated experiences experience customers digital accelerate invested Frosty to sales to We nearly limited-time the full the This improve in mobile that by flavors program. resulted growth also provide We tailored growing XX%. year exciting our to new app year. throughout our fresh, in and with in customer loyalty

pleased menu we and are with locations. at We XXX the we locations. in XXX efficiency. journey labor over the And also driving and voice-enabled at advanced We implementation seeing deployed AI results digital are franchisee nearly company boards our accuracy with taking digital of order improving

Our execution provided labor drove an efficiency check our basis a areas global in restaurant to and year. margin all point to led improvement the compared higher average company-operated that to prior of XX these

expand made to Wendy's around new strategy also We progress our great the more XXX the on restaurants. brand world, opening to customers

This new we see but underperforming closed to XXXX, stronger trade as to restaurants. the AUVs be that expect sales system in by the thing closed. restaurants the and we Wendy's in growth absolutely the right double restaurants to we areas closures of will strengthen replaced do a headwind planned, is to many As where

will the increase We and franchisees higher-performing are with profitability. to that customer supporting incentives develop enhance restaurants experience

growth customers year and a accelerate new established unit we the making ended in commitment right are are promise, In our to Wendy's. we Famous net This build with growth love more you. XXXX, flat well a for unit made we food, is positioned XXXX. to Wendy's to for expected, As Fresh

adopted long improved team accountability our organizational we structure positive company. new to new and yielding is onboarded a first, XXXX, we best putting drive a making and in and Our These leadership Wendy's the on operational new the restaurant, year owning team way the the a goals In brand. operating grow deliver our achieved star the changes one of responsibility the the future, to results is committed every excellence into results. and already always will the customer structure shared for

in of XXXX, we us. of work While proud a lot of ahead have progress we are our

We deliver two for to an increasing will Wendy's in provide areas the customers. experience of continuing These quality deliver to QSR food operational the exceptional promise intensity by on highest and our focus aligns support capital long-term will our to franchisees ensure our success, that and our with strategy their and allocation company, growth initiatives the for our objectives. value critical drive it's shareholders.

As have our such, we made to decision quarterly payment. dividend rightsize the

dividend policy updated growth Our in and increase investment flexibility provides the to beyond. XXXX

CapEx This build-to-suit unit our increasing will year, world around development our in increase traditional we program. by both through the and investment

accelerate the customer technology enhance experience drive We in will also productivity. investments to and

we attractive to policy today. addition, updated an In allocation flex the opportunities, repurchases opportunity share exists believe attractive capital and us enables when up market our provides

our As share in Ken more a of And are plans, confidence increasing will share sign we XXXX. growth repurchases shortly. details in

to value maximize over We this the confident enables term. updated long are us shareholder policy

let outlook Now our share XXXX. for me

unit plan accelerate Our built is drive growth EBITDA to net development. sales and continued and adjusted

to famous exceptional have global strategic Fresh We delivering execute in experience XXXX. initiatives customer accelerating and on food three an unit development.

relevant beverages. XXXX, uniquely focus important continue items, including to with will have to in fresh innovation on year, food We and value and core to this craveable This value. famous plans we know chicken lead positioned throughout customer need. Wendy's Our we'll for categories, is impactful and customers look strategy expand fast-growing

starts At Wendy's quality. with value

Bag quality delivering Biggy attractive uniquely points. is price industry-leading at Wendy's, Our iconic

platform. innovation We the and through our have to strengthen Bag strategic further value Biggie expansion plans our leadership continuous of position

new by available tailwind deepen exclusive Breakfast unbeatable time, and connections only with Wendy's members will top our app. remains through We ones offering will our limited growth. a attract Wendy's to a at loyalty and the deals priority provide

of drive continued to innovation in to invest to will advertising sales. total continue its will Breakfast momentum of higher we share XXXX, a percentage In this compared daypart. dollars around receive

We this next year. share we driven be breakfast about later stage product expect of innovation, to the which more in growth will by

capabilities. Girl see on core to offerings bringing that promotions limited thin new Scouts new of can our points customers leverage and partnership Frosty. An how with by example is is also marketing passion with outstanding continue You us execution of audiences. U.S.A. the delight This and together time another customer example we inspire innovation, a and mince partnerships attract our strategic the

deliver perfect of every customer intensity commitment are part to increasing we our As time operational a across restaurant. every experience,

standards, one with of framework This clear accountability. includes and operating a the consistency best way

resources for for and provide initiatives their in will exceptional franchisees, their These teams are our to support customer experience and field provide margins. enhanced We drive an restaurants. investing level restaurant

digital members AI ordering boards, the kiosks menu across and company voice-enabled on are and frees technology We XXXX implementation up quality restaurants. franchisee simplifies ordering of This accuracy. to focus in digital accelerating and and crew

builds unit of are unit new about XXXX. goal on commitments to X% talk let's based in underway year, we additional restaurants and growth in for net this our new add growth. X% confident to Now franchisee

years, and it's news. to amazing reach this Flynn great excited opened Wendy's closing, range, for have net some the brand. potential At a the unit rate to highest the share growth full this in Group off XX represents this In In the our vision over and of we start. year Wendy's of clear earlier recent to Australia, Restaurant first an midpoint I'm

assembled I our confidence about outstanding QSCC every with want I to beyond it efforts and for growth. employees, turn at and long-term drive delivering have single our this day. With I'll for have our over look operational our allocated resources the and I our at see a thank details customers will lead March we heightened X. partners to Investor franchisees to and You on more to executed growth Day sharing Wendy's XXXX their team forward Ken. for plans in our in our our intensity. franchisees plans our to that,

Ken Cook

be acting Wendy's Kirk, honor driving topics It part our Financial potential. you, of to full I to today be Thank and will excellence decisively X are we team, cover here is as with this good am morning. you and Chief the I and thrilled you committed to operational with everyone. morning, Wendy's unlock an to Officer.

results details share quarter capital will followed our I on allocation updated fourth our policy. First, by

for our $X.X with and XX% our line collaboration. by X.X% growth U.S. in U.S. our driven increases reached by X.X% Global I'll international review increased X.X% In profit, and the SRS outlook growth Next, was was dayparts. in discussing over average CapEx were SRS U.S. results currency all sales by strongest quarter, check SpongeBob systemwide of and our cash in I'll and constant billion, same-restaurant sales the by expectations. a fourth sales across growth up business. with the expectations. and driven year-over-year, flow traffic October, on in finish XXXX and basis in driven

what SRS combine strongest demonstrates This was we with brands XXXX growth when we appeal. the can accomplish multigenerational and iconic since monthly two

fees of the termination year-over-year million by driven to quarter, the X million million. during grew revenue the sales. performed For increase in Franchise restaurant to line quarter. from million, year-over-year increased our SRS X.X% last $X $XX.X Company-operated $XXX.X that the $XX.X with systemwide category. revenue closed $XXX.X restaurants months in million, fourth increased to the due primarily the fees Franchise to royalty

the company customer productivity U.S. XXX restaurant increase savings average to by sales margin of Our check point combination a was prior a driven year, leverage initiatives. basis and from XX.X%, and a higher growth count from compared

and in breakfast company's $X.X $XX.X increased income the X.X% $XX.X of $XXX.X we of million investment and Adjusted of quarter. rest was million, the depreciation computing million other expense cloud expense Walking had in of interest EBITDA the $X.X the million. amortization, was through statement, G&A $XX.X million. million expense million advertising of income to

$XX.X XX.X%, X.X% in state million last due increase income. the quarter to Our Adjusted $X.XX the adjusted than discrete a per which year, and net rate tax year. $X.XX, was for share prior a was higher tax of over which This item. was primarily resulted was earnings adjusted

restaurants, balance free $XX.X Moving from XXXX, on to operations. in cash basis including generated year $XXX our cash invested to $XX.X a million flow On to strategy $XX.X sheet. we our flow accelerate new million development $XXX.X cash company-owned of in digital our and and expenditures, capital million on million. We of full million bringing

XXXX. XX Additionally, of supported we in our new them which opening with development million $XX.X the of in restaurants build-to-suit invested program over XX

of of million are Through end and reflected a $XXX their calculation. cash debt X.X shares remaining net a year of balance cash investing on the are in not XXXX, reminder, an cash as of free part line our EBITDA repurchase share the which on and flow approximately approximately cash in million with ratio our which and February cash of million $XXX $XXX We $X.X flow build-to-suit ended billion. full year fiscal equated section we million. approximately year authorization, our currently $XXX expires repurchased own statement and our the unrestricted of flows And million equivalents to had leverage of XXXX. adjusted X.Xx

updated our you like allocation share to I'd Next, capital policy. with

drive invest As we have sufficient value, to Kirk we maximize identified to in ensure to mentioned, we our in long-term have the flexibility opportunities to updating order shareholder are policy growth.

continues to priority first be in business. our Our investing

CapEx increasing as to add drive building enhance increase we globally and to restaurants, and kiosks million restaurants XXXX to digital and menu are million We $XXX efficiency. and between our the in loyalty $XXX including in boards experience, customer technology existing invest new

In our accelerate restaurant through investments, build-to-suit CapEx invest to new addition to our to around plan XXXX development. in million $XX we program

programs one is Build-to-suit in build where of and franchisees restaurants. to pool with in new our more of for the rent higher company our franchisees incentive the exchange restaurants co-invests payments, expanding royalty

second XX% quarterly first the adjusted share. we this The priority a This per company's payment dividend. next is quarter, $X.XX quarter ratio target XX% of payment payout to Our share. of announced new dividend morning, Beginning dividend to our earnings. dividend $X.XX paying in of an equates attractive is per

expect full year $X.XX share dividends. we to the per pay out XXXX, For in

to Our balance is third maintain sheet. priority strong a

have target shareholders EBITDA. We repurchases. Xx through of And share ratio a X.Xx leverage established to we net to cash our return adjusted excess will lastly,

to we up compared to million $XXX with through dividends to expect X. policy with increase this to and at beyond, the repurchases our repurchases the you confidence to We and growth the forward year's that months. morning, announced as in Investor a the in to this an our and next cash increase to our view and shareholders $XXX the believe activity changes happening in allocation increase million XXXX which we share March to capital few plan XXXX of share represents in majority XXXX. our demonstration we of We sharing up for planned have of belongs of repurchases, of shareholders combination $XX share And Day cash in to return This XXXX. plans more we to on our million and look

we XXXX, I'd share and plans our deliver my increased execute to investors. into that, approach credibility diving to for set and our guidance. realistic will financial with to level them. then targets Before an We of want with intensity outlook like achievable do to our strengthen To

for at outlook. began is QSR multiple for be away food We for traffic. to forecasts from from is Let's away financial indicate X% flat turn to and spending traffic to category and our third-party down consumer looking to home home remain both expected planning to industry burger XXXX by These the last food expected that pressured in compared year.

new Our sales year on XXXX we full outlook does not include driven any same-restaurant Based new impact X% tariffs. global system-wide unit of the combination and growth approximately sales from those X%, growth. by XXXX anticipate of forecasts, to

fourth rate system-wide underperforming due As took negatively impacted to sales a our growth reminder, system. actions the close strengthen in XXXX restaurants in we the to our and quarter is

X% global X% XXXX. expect net and we in between to Additionally, new be growth unit

will productivity initiatives be We sales Margin performance restaurant growth expect leverage. XX minus plus by XX%, supported and of points. U.S. basis around company-operated or margin restaurant

the to efficiency advertising restaurants. that experience in operations We investments will field our and are improve dayparts in all across drive customer spend company redeploying breakfast

million. As and such, $XXX G&A we to between anticipate million to increase $XXX

addition resources, experienced XXXX, In XXXX. the levels the compensation investments expect compensation to with we incentive payouts at assuming compared in we in higher in to favorability field incentive target

of and anticipate approximately discipline maintain to continue will this and X.X% XXXX to represent G&A sales. in area We system-wide

and expect from Taking items We in expense $XXX $XXX $X.XX and of EPS to to share. million. between into million debt as We we plan expect XXXX EBITDA $XXX increase per account, of refinance all adjusted range million $X.XX $XXX to approximately interest adjusted these to to XXXX. we million anticipate maturing

on between earnings in driven expected $XXX is strong are million. to drive building technology, year, can related we look take about accelerate customer goals sharing both by more excited we to including strengthen flow is I'm to of operational proud profitable and decisive we which growth, million, capital and offset elevating achievable earnings and sales of In are investments be results fourth intensity in increase foundation what partially and success. action increasing experience. new Free and opportunities our the $XXX by closing, growth. and and $XXX the sustainable, million company control setting primarily we In taking quarter Throughout we restaurants for upcoming growth. the CapEx million expenditures XXXX, help our realistic forward to that long-term cash advantage are will of and road the the of Investor ahead business at $XXX our The and Day.

our I'll calendar. Aaron now Relations to Investor over hand share to it QX

Aaron Broholm

Ohio corporate The Ken. our you, headquarters at hosting March Investor an Dublin, in company Day on X. Thank is

Global an institutional at in out will us webcast join Dublin, The and by me. followed website by Citi March please are will hosted Global the Consumer XX, you in for in in Investor City March on through NDR can would we be and Miami, March Retail our On live be Relations XX. If in XX, New we and be to Sandler. On like Retail to ir.wendys.com. York will Conference and Chicago the Conference accessed UBS Piper investor reach an event participate Consumer

are equity respective at in the events, us analyst host of please joining contact any sales firm. the contact you If or sell-side at these interested

a first Lastly, earnings our host and to X, on plan quarter May conference report XXXX. we call

the Q&A the only. We question will Due one first please covering of question. analysts, please the to to yourself now up of high the part transition to Operator, call. limit number queue

Operator

Instructions]. [Operator

Jeff Bernstein Barclays. Our of first question comes today for from

Unknown Analyst

just Jeff. for quick [ your expectations for just year. the question question. This for is Pradik embedded on comp Thanks the ] a on Ken,

was of X%. that to growth within that mentioned sales guidance net expectation X% system to had within X% a the embedded growth You X% unit

first And to your date. comp just what in wondering quarter the especially growth? in forecast trends assuming for then So I'm you're

on been you provide -- any Just whatnot? of and all kind can how things color just trending anything weather with this have noise

Ken Cook

Yes, happy to.

SRS achieved make we fully and expect XXth XXXX to that proud our the in So year of global XXXX consecutive year. consecutive growth XXth

terms SRS guide, in would of an for say XXXX. So I positive

of to quarter. do year-over-year be In first shape, SRS expect terms down we in the the

to the year expect the facing good some we trough. across traffic started we've exacerbated weather news industry the So events headwinds country. QX The do is overall significant by be

the the growth to expect improvements as market. industry move We driven traffic our exciting improve winning by in to programming our and throughout both in we rate year, drive

Operator

Geiger of next Dennis comes Our from question UBS.

Dennis Geiger

Wondering pipeline if much looks to positive or outlook, bit like? 'XX of some the on I franchisee of are how guess, there, agreements sort considering point that guys the more detail maybe by you you environment, talk called at the development a grow targets And what could about drivers development maybe demand including the out unit little covered any out. in this of by sentiment current just some headwinds that broadly, overall of the but offset more

Kirk Tanner

Appreciate Dennis. Thanks, that.

question. this me Let take

high a our of in confidence on growth. to have X unit level We X net guidance

those in the have We see place. can agreements We close-in build.

high a Day. look, March than in And to growth or built restaurants build most Investor through have of we continue. have where years. the XX that well, more confidence. represent we to exactly we XX outlook level to unit our walk expect going we're X restaurants long-term And will our So also those at this and years like We'd

many attend walk on So can long-term restaurants. we we building through that more our so hope can outlook

Operator

Palmer David question from Evercore of ISI. Our next comes

go ahead. open. now line is Please Your

David Palmer

consumer. a in in try of two lot here. you've know just squeeze I'll I quick done succession to Kirk,

if you your Day, applied the know front to big hear any there's a to maybe bucket drive opportunity. consumer run brand insight energies are You I love being and team teaser you're have work your don't and about, want that to excited audited of on but and could. done if you most Analyst that, sort opportunities entire comps the where menu

change you then I And ago joined, are in this I the compensation the have you've think ways year for is incentive a Analyst Day, priorities -- in that maybe changing restructured ways really area the what another rewired know to which will what of also, And now. in is about organization but company. the what and since metrics also ways

Kirk Tanner

good David. questions, that. really Yes. Appreciate Two

a at the momentum consumer things let menu. drive I'd at Investor bit just about we're relevance. First, say you see looking little will me that that things talk Day continued on of the A that couple and

had So lot in we momentum. a you certainly saw of QX,

into look We will again, have we One, drive distinct the that areas. But menu. portfolio, collaborations our that that menu we culture in core share our in will XXXX, us momentum. at core will, three tap

We expect that to grow.

that. in We have to invest

see innovation we'll see Nuggs things innovation, last as like those we and that You'll that, share did details you'll us year, pure well. innovate Saucy off

last, value. And then

we far at starts to have value, have on we relevant the as We a We Biggie especially have highest quality and quality our an amazing based in We that's platform. think with Bag really think industry value. proposition the Wendy's. quality with value in as have buy

we here unpack and we'll be three share things innovation those So We'll person, in out, try you you're actually, the can pipeline. will if innovation that it. handing

come for Investor hungry, Day. ready come So

intensity operational really operationally, Separately, is important.

Our experience time. to that expectation a perfect is single every deliver customer is

wired our have deliver to just So we that. organization

organization have really we priorities, excellence single is delivering metrics focused on that We every at great align And our delivering our customer execution around will all an experience. compensation, restaurant. our that

the how all appreciate some franchisees. of life will that both U.S. I greater scorecards and and Abigail X, questions. work the will but on operational deal do new about and So we we structure in those March talk We'll that walk to things detail. through with bring

Operator

Citi. next Our question Tower comes of Jon from

Jon Tower

past the curious, that And considering just in why of Hopefully, go hear activity rather perhaps the you're decided of the down the okay. reallocating the me breakfast repurchase in debt some this then out? had, dividend rather brand paying why down. building perhaps the cut to you reinvesting was business refinance back year just the in that separately, has you curious dollars I can than some that to today, path success announced of that you when than in advertising the say,

Kirk Tanner

over one. dividend. We allows is first growth it financing. and plan. part still capital think in building I'm talk an plan, have the is And kick I about That accelerate second, on an Jon. more I Thanks, restaurants Look, And net in Ken starts investing it Look, our our thinking Yes. the important handle and unit to winning question. think, of One, that critical. about an dividend. allocation, when the growth attractive with it policy to I'll attractive about technology us development, marketplace. Appreciate to

So well, it asked position was a we time the a we're price. then attractive like, you we question, in very stock have in a -- have where

to advantage So of we can we're both. going take that. What I'm saying do is

to flexibility stock I'll we're to have that, to to long-term it on and plan, We accelerating going by about With that. growth grow in our bet ourselves repurchase. Ken talk our turn over

Ken Cook

for in terms planned of XXXX. Yes, we debt the Jon, activity

million We December have this year. $XX matures of in that

also expect the total the push an the to XXXX. in mature or bit drawn Right sense of into future. in of continue debt that about $XXX a whether and makes both to our million overall to of WBS the WBS plan further we'll million that September to through little would we've principal refinance have beyond $XXX evaluate perspective, pull of From that late securities the amortization total forward of XXXX. security. it gross that now, up debt We I XXXX Obviously, in decline

that -- that our to as by, then million lower we leverage So time, we ratio it $XX net of to to drive expect I'd range. a $XX million same at march call the And year end to plan through. to increase decrease the it, EBITDA

Operator

Piper from Sandler. of question Brian comes Mullan next Our

Unknown Analyst

one question to was of first decisions on breakfast the made business. part. a I Just day Kirk, this think recommit to you the

the in breakfast said grew remarks, prepared you X% think year. I sales last

strategy how learned? investments us you years. next far, just know have So breakfast a period thus a assessment but require is next over if to say, longer could just the over, this time? that And you corporate pulling to year, an X X your you're that several does over little from I of the years? inform what And give with going ongoing

Kirk Tanner

with on of breakfast, It's Wendy's. we're over us business XXX for breakfast question. years XXXX can reflect our makes about if a you our large It the Brian, still to we tailwind faster points for priority was several that us. grew thanks it reach because potential, priority a category. performance than potential for the -- the next the basis a Yes,

ways. in I We'll business. to other plans in will receive still to do think to that. A&M do about we'll awareness. X have the it things, of have It versus and But continue an the in investment invest we driving just outside rest

the all, business in a a All have that In full long it for and our We we meantime, our growth. have also Wendy's, go enhance an customers to innovate on reach will this and organizations, will later some our accelerates still our that and potential. strategy and important to breakfast experience to you'll that daypart with with year continue remains way innovation excellence for to daypart be our executional line the drive tailwind field see that top have the breakfast.

Operator

[ Wendy's Garcillo question Danilo comes next of Our ] from

Unknown Analyst

wondering from, organization. to the expand say, the can your over think from you new early you topping And I bring practices maybe to organization observations Great. on which can past let's experience best Ken, do was from if the you being business offer relatively you your can if UPS. on

Ken Cook

Dan. Thanks Yes. the for Thank question,

create here I'm I'm components shareholders to welcome all, over the are to value of board value. have thrilled the Wendy's need am be of part First ultimately on I And value X.X for we really the all observations create the for early last me has create team. My to Wendy's and people tremendous months. grateful how franchisees. here for

in We best the product industry. have the

We really execution I global mean operational throughout driving add a that, value have and brand, great speed. can focus, excellence the is I employees business. very a passionate And strong franchise Where system. by and

focus, handful gains items of means of drive that the the In to are for biggest going terms to us. allocating that long-term resources

empowering experience. field in is and example use urgency, customer pace holding accountable it's the progress And that targets resources calendar to detailed and against our those faster have the so An On delivering in progress. of can XXXX plans to it's execution, we're of of we speed, the have. track we our a terms sense ensuring that making people in people then not watch, investment enhance for of tracking plans, in to place increasing the a we make decisions a constantly are

So that's It's why I profitability. about more to restaurant laid comes about it and building it things. out increasing and down two it's restaurants really

Operator

comes Bittner from Brian Oppenheimer. next Our of question

Brian Bittner

Thanks think in your talked to XXXX. to X% unit X%. growth last is I guidance But on X% growing X% quarter, about XXXX you

is underpromised or growth of your So last related shifted what openings approach, unit it's over on the Ken, you this as if months, the side. can optimistic guidance has more less about to part talk closures? few perhaps historically been maybe And

understand So the can us you help change? just

Kirk Tanner

Yes.

Let X%. underway. me the We They're guidance yes, again, year, the be timing But that X% built. built look, restaurants is so have it future. a from high the that can XX We're year restaurants we in one being again, add this That's and -- shifted. at And years. That level we've this last say can see foundational. built those I'd -- more still take looking has confidence. of And units represents than in those standpoint. still of to comments Ken a will some

March share it [indiscernible] to our continue get Day, in we come. unit Again, that yes, build investors. important about we guidance that very the with build we'll accelerate and at X fully the the we'll Investor credibility So expect to specific years very to philosophy, of is details

and of additional investments build-to-suit X% include to will CapEx X% the this that the so and we're units, And making. some

Operator

question from Chris comes Stifel. next from Our O'Cull

Please ahead. go open. are lines Your

Christopher O'Cull

You And can just that I it's I the experience. missed timing quickly [indiscernible] investments. would if make impact customer apologize of the [indiscernible] this,

Kirk Tanner

the our impactful making customer experience in is Yes, we're which which every the standards we in our is I gain restaurants, in great most we're the in that momentum. in delivering the think Chris, customer reach experience the single important organization, time field investment frequency short-term most

experience. Of great and back delivering that gotten great comes course, with on things and we can focused and gaining that to so 'XX and that 'XX organized start have menu talk experience, that aligned momentum and we are intensity about, operational that in in fundamentals the by great we really that innovation ourselves we customer continuously all customer ourselves delivering the

Ken Cook

thing only technology is the And a customer piece also add Kirk. right, of I'd that experience. is that's Yes,

menu to rollout and labor of which digital efficiencies going Fresh the customer enable the we're system, the in our restaurants. experience our across improves some AI accelerate boards So

Operator

comes question Stephens. Salera of go from next Please Our Jim ahead.

James Salera

I kind share could to improvement be improvement for have with fair then traffic earlier, overall do low in year mentioned in some the build the improvements sales traffic expect be your or of of same-restaurant there maybe that Wendy's parse programming industry the you of driven out, should and QSR. specific by efforts You and taking if point in just XQ the winter you

And and restaurants. maybe value-focused marketing saw second from could we question. QSR lot full-service a in that especially even part a I Obviously, on very a some of the if add 'XX, in environment, kind of

looks shift You how and give price me in 'XX focus versus that a the progresses assumptions just around bit maybe to messaging how of dollar of if back more industry we kind little kind points? experiential

Kirk Tanner

question. Yes. Look, really a I think it's Yes. good

driven see lot a a that QX in being about As improving the start, we Ken the soft Consumer We of mentioned, pressure. year. weather. balance by talked

that to we continue I we industry about think the attitude will And a marketplace. think in One, improve. always how things is the think of look, that. couple to of our win

is against one. So priority in marketplace number the category the winning

Number activities two, rest to this create that we year, can we both we that. experience in the think of planned that have do

a that and in in think We'll that, do XXXX. into talk for could but Wendy's also things high have we collaborations continue that, about investments we we that core innovation those creates our QX. moment to do have value, we we'll exciting Wendy's culture in and connect again, that that it value that We showed create

So combination it's of things. those a

Obviously, Let be for going value. it That's like of value. part customers an still just about are our strategy, looking is and to talk consumers consumers. important solutions bit little me keep a to for

have that can quality starts And you with I We in Absolutely. Bag. terrific at a value brand Biggie tell Wendy's.

lot one find have equity, new think to highest innovate an continue equity to be the customers, bring like on business. we no I lean in important experience but value elevate that part for to of the continues to continue platform. got a value a value has to big that ways quality already this We has We to brand platform. through biggie. We'll proposition that equity move But can the on customers look great this It plan our in of and strategy. to and

Operator

of question next comes from Charles TD Cowen. Our Andrew

Andrew Charles

the the service learnings stores. you from I'm well guys speed early more as what what of are drive-thru particular, Kirk, In as are voice you the to of with pilot. curious lift seeing Great. check as the expand pilot

Kirk Tanner

XXX. XXX going this to expand Yes. we to We're XXX year. expanded like results. to to it We've Great in the really Look, question. over it

to we lot thing it it love it, look, the about confidence. One test to have or X a I a So I get X week. better. continues put almost times of

I close office. is you one customers What as We and have it gives opportunity well. build would the tell it experience improving. is definitely here sales It orders. to what in accuracy understands to to And the ask their the is us exceptional. drives the for

want be to And that experience, remarkable. we

have where allows we that -- started So to move rest to prove take the the to us that. of We're to point have proof with system. we going you have And restaurants XXX. real out that it this a once then strong XXX

I think edge. it's cutting definitely

important I to to Investor March fresh on you X. the here think when it's come you'll experience AI Day get that

got we're that really excited a about. future, forward. it's It's So moving and bright we're something

Operator

Gonzalez of next question Our from comes KeyBanc. Eric

Eric Gonzalez

that the anything with think heard retain you tail? you clearly do additional the that to how Spongebob the a And you I expect regards during able promotion. that something with execute longer some had of You year. to [indiscernible] said customers I different this such October activation. should think Were the need could strong you see a you collapse portion you you like do decent to of you a shoulders around acquired

Kirk Tanner

that deal. very Look, performance. If than we Yes. we faster I QX, category. Obviously, about total, learned in great grew in think the reflect a excited the we look, XXXX on were just I

to continue learned We that lot. QX. do a in We

get experience? famous event do is do chain you you all Wendy's create that you grooved, into exciting how how We take when of You for? a great that that you be supply how the think things. have about like we an think those XXXX. part that, And How about learned do what have you

those the near little flavor have of And XXXX, the a of we're Girl the we that Day continue bit Frosty. being that's But Again, we'll going on Scouts into on we'll lot talk in important right think Scouts great of now. collaboration with mint we future. U.S.A. a fifth and in of in thin things Wendy's but culture that forward. early those the we the and to those delivering talked to with moving and iconic do start planned Investor Girl a at share about an an experience. partnering of about part driver the that bringing the example We'll That's an a

are -- create experience, healthy of important and those dissatisfaction us, we that these better execution, chain, supply really experiences. things better. do a customer always to also from getting have continue all We we How we learn are to

Operator

from Krotthapalli Our next question comes Rahul JPMorgan. of

Rahul Krotthapalli

stores this tracked multi-brand around are unit context and to system the XX% the to discuss growth the of as how I'm franchises time cohort system And around franchise acceleration also cash-on-cash going who the versus XX over prioritize development. contribute of and new mean given is in you for fact is operators. to see allocation? that the owned compared they curious operated Can how by here rest U.S. returns to profitability capital of pre-COVID. probably the the have is U.S. U.S. the average I some

quick a is for XXX-plus mix follow-up, Or you some consolidation room right brand? the move as do forward? the see you for the franchisees And

Kirk Tanner

terms Yes. XXXX, collecting the Rahul. by start Thanks share for question, in data, you in and saying, we currently profitability the will franchisee our with we proxy in And later good we're would look a I that improvement in of margin further saw would in expect you improvements if We at those franchisees, XXXX. for XXXX. restaurant year. global franchisee profitability as it in

points In expanded the we'd XXXX, restaurant expand our basis by and we in at XXXX. end expect margin XX again range, to that high global of to XX.X%, our

fourth from a we we So took seeing economic perspective. a quarter strengthen unit we the to little about And the bit our actions like in system. talked what we're then

co-invest end, the the we're of expands will ones the is franchisees that of we franchisees we the the mentioned also restaurant the there. with seeing important the double We'll close. company on that openings an the That's can to what we're AUVs which And happy about be that the we have. front with especially Build-to-suit franchisees part that. returns pool pool the of in continue to that another we We testament expand new where that have. new average see Wendy's. the of restaurants that that open strength,

Operator

of Our next Northcoast Research. question Jim Sanderson from comes

James Sanderson

I back the wanted discussion to to go on breakfast.

think growth about I in I gets X% sales which X% the think mentioned to achieving you year-over-year, mix U.S. you

bit as in expect daypart guidance? Just what's wondering divert trend how mix areas? you you of back And you're XXXX a if other the embedded step to in into expecting little your a investment

Kirk Tanner

Yes.

that in So We business. than rest That is growing full We're how to of we're potential. breakfast expect awareness. of grew we driving be we faster we on the know the guiding. part still X% of our a X%, year, lot have

And with breakfast. have food our quality how on We we highest the have. the experience innovate platform. great deliver learning in we're industry we food will to think the got operational with to customers excellence. the We We've a that

So we counting we know potential of it are still beyond. XXXX and will in we lot have that a a and be tailwind on, us for

Operator

from next comes Our of question Cho Sachs. Goldman Christine

Hyun Jin Cho

Great.

So it in X% was to close the international see really encouraging to comps markets.

you're new some markets priorities be international growth the to in XXXX, you're able the would especially texture expansion acceleration side, X% that European and the planning given you So enter to within And of here. for X% talk to you're expecting drove key net that here? you the the kind what to add to the could unit

Kirk Tanner

question. Yes. Great

in terms from uplift markets. and Canada get I the to think international smarter the in in quarter driving year. seen market fourth the these We've delivery we're launched in that good the an the and comp sales growth, terms of a there. and digital smarter part. We've in was we to about important new U.K. strategy lot of continue innovation go how changing this in learned we collaboration

bring. that about progress will So excited the that,

bucket, a unit We're other you those how We'll it countries XXX in coming half down XXXX. to and between we will you markets from break and a in expect drives of combination and attractive I'd Europe. X/X to also details expect details of March And open in from new terms growth, Canada beyond. units, about Latin those on share within that coming new our of units what international a and places XXX going About give lot around and APMEA. expect America. from And X. are markets. both of the some we winning most X/X In of growth about those about in with We'd international see come lot good XXXX to

Operator

of Our Capital next Reich RBC comes from Markets. Logan question

Logan Reich

versus composition have the XXXX. Can a that's on expectations? quick you the of of same-store I follow-up from breakdown international into any for U.S. provide baked sales outlook sort your

Kirk Tanner

low better in kind double-digit than our would we terms we systemwide in growth, perform international single-digit U.S. And line expect in deliver the I of that to assumption kind and win to we've system-wide single the sales the down again, U.S. expect deliver of is sales of X%, traffic on expect system-wide plans low In as would the benchmarked to growth. shape, to sales high of We terms industry the in marketplace. to flat that or growth.

Operator

Gerald Our for final of question today ahead. go Lubinski Please comes from BMO.

Unknown Analyst

thoughts the expecting you're U.S. inflation the XXXX. your on get Hoping of for in level to commodity

as out and costs, the of there, one relates puts of to which beef peers called for XXXX. your some takes as it And risk recently specifically a

Kirk Tanner

Yes.

is So of embedded X%. rate X% guidance and inflation in inflation commodity our about about wage XXXX of

offset of bit in little other that a we'll of improvements be the from we see right, partially pressure think you're We areas. by In driver think beef bacon, also year-over-year. biggest terms commodities, increase of will

in our here proud you So sourced the beef, Domestically of beef. know, never fresh as U.S. we're frozen

So quality best food in us provide it the industry. enables to the

now, it significant of cost to impact watching the expect So wouldn't that's what's a terms tariffs, we right any of something sold in result as embedded but is of goods we're tariffs, in of that what commodity with QSCC offset what incremental headwinds can if other areas sure are the doing to there that we're we at make guided that basket. working on closely, in to we our to, guide partners

Aaron Broholm

forward for our our March this X. Have We question us you, joining a call. day day. on thank of you last Thank was Kirk Ken, the and to at you, speaking morning. That everyone, again look with and great

Operator

today's Thank for you joining call. all

your lines. now You disconnect may

The Wendy's Company (WEN) 13 Feb 252024 Q4 Earnings call transcript