Wendy's plans to accelerate the closure of some units

The Wendy's Co. will close more restaurants, accelerating planned closures from 2025 into this year, executives said Thursday.

The Dublin, Ohio-based burger chain, which reported its earnings for the third quarter ended Sept. 29, said it has “made the strategic decision to close additional restaurants this year that are aging and growing.” located in underperforming trading areas. These restaurants have AUVs of approximately 100% $1.1 million and operating margins well below the system average.”

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The company wants to replace them with restaurants with an average unit volume of $2 million or more.

Kirk Tanner, CEO and president of Wendy's, said, “We designed this initiative to ensure that many of these units are replaced with new restaurants in better locations with significantly improved sales and profitability.”

Tanner added that executives expected total closures in 2024, including additional closures in the fourth quarter, to be offset by new restaurant openings this year, “keeping our net growth approximately flat year-over-year.”

Gunther Plosch, Wendy's chief financial officer, said the “additional closures total approximately 140 additional units.”

Executives told analysts that the planned closures would be spread out geographically.

“If you think about strengthening our system _— If you look at a brand that’s 55 years old, some of these restaurants are just dated,” Tanner said.

Wendy's is currently building on its partnership with Coca-Cola Freestyle for the $1 promotional drink, Tanner added.

“It definitely covers the portfolio that Coca-Cola has, both full sugar and zero sugar, giving customers real choice,” Tanner said. “That's a benefit at Wendy's and we wanted to celebrate that and remind people that that's when the $1 promotion happens.”

Wendy's plans to follow mets SpongeBob SquarePants action in the third quarter with a salted caramel frosty and premium mushroom burgers in the fourth quarter, Tanner said.

In the third quarter ended Sept. 29, Wendy's net income was $50.2 million, or 25 cents per share, compared with $58 million, or 28 cents per share, in the year-ago period. Revenue was $566.7 million, up from $550.6 million a year ago.

Wendy's third-quarter same-store sales growth was 2.8% worldwide, with increases of 2.2% in the United States and 7.8% internationally.

As of September 29, Wendy's had 6,010 restaurants in the United States and 1,156 internationally, for a total of 7,166.

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