|Todd Penegor, president and CEO of Wendy's|
“Our third-quarter same-restaurant sales for the North America system were driven by strong customer count growth and a slight increase in average check,” said Todd Penegor, president and CEO, during a Nov. 9 earnings call with financial analysts. “The benefits from our brand initiatives, image activation and our system’s continued progress on disciplined pricing have contributed to us bringing in more customers to our restaurants. Conversely, the QSR hamburgers category’s growth was driven by an increase in average eater check, which was largely offset by a substantial decrease in customer counts.
“We believe the healthy and sustainable way to grow is to remain committed to driving profitable customer counts. We are focused on bringing in more customers more often to our restaurants. This is more important than ever, as the gap between food-at-home and food-away-from-home prices in the restaurant industry continues to widen.”
“On the price value front, our 4-for-$4 offering, which launched a little over a year ago, has been a hit with consumers, and we remain focused on continuing to find ways to provide value across our entire menu,” Penegor said. “Our promotional calendar in the third quarter came together nicely and was successful in refocusing attention on core and price value. And our results benefited greatly.”
Penegor added that the company is on track with its refranchising initiative in which Wendy’s will reduce company owned restaurants to approximately 5 percent of the total system by the end of the year. Additionally, the company plans to reimage approximately 500 North America system restaurants and rebuild 100 restaurants in 2016.
Revised full-year guidance for Wendy’s includes adjusted EBITDA at the high end of its previous range of flat to up 1 percent compared to fiscal year 2015. Additionally, the company now expects to generate same-restaurant sales growth of approximately 1.5 percent for the North America system.
“We are on track with our 2020 goals,” Penegor said. “For the North America system, we continue to target average unit sales volumes of $2 million, restaurant margins of 20 percent, a sales-to-investment ratio of at least 1.3 times for new restaurants, restaurant development growth of 1,000 new restaurants and approximately 500 net, and image activating at least 60 percent of our restaurants. We also remain committed to our 2020 company goal of delivering adjusted EBITDA margin of 38 percent to 40 percent, and we plan to provide additional details on our roadmap to deliver this margin expansion early next year when we provide updated guidance.”