Wendy's accelerates brand transformation

Wendy's accelerates brand transformation

- Balancing price and value remains a challenge. - Innovative products and restaurant reimaging driving growth in traffic and sales. -

THE Wendy's Co. has reported an increase in revenues for its first quarter and said it is accelerating its brand transformation, including its "image activation" remodeling strategy.

The company noted that it had positive same-store sales that were up 1.0% for company-owned restaurants and up 0.6% for franchised restaurants despite the adverse impact of the cold, snowy winter in much of the U.S.

The company added that its "Right Price, Right Size Menu" is starting to produce good results, although the "price/value component" of its business "continues to represent a challenge."

Wendy's results are shown in the Table.

The company said profitability for the quarter was "solid," explaining that first-quarter results last year included an $18 million net gain on the sale of an investment.

Chief executive officer and president Emil Brolick said Wendy's expects to have 50% of company-owned restaurants reimaged by the end of 2015, and he noted that "tier-one reimages" that were done in 2011 and 2012 have led to "very positive" growth in customer traffic and sales.

He said the company is offering an incentive program to qualified franchisees to reimage their restaurants and is receiving a positive response.

Brolick said brand transformation also includes a bold new Wendy's logo and stylish uniforms, as well as new packaging that features the logo and innovative products such as a line of Flatbread Grilled Chicken sandwiches that were introduced in April. He said these new products "will resonate very strongly with consumers."

Wendy's also announced that its board of directors approved a cash dividend of 4 cents per share that will be paid June 17 to holders of record June 3. The payment rate is double that of its previous dividend.

Wendy's noted that the board, at the end of 2012, authorized the company to repurchase up to $100 million of its common stock this year, although it has not yet started that repurchase.

Wendy's, headquartered in Dublin, Ohio, is the second-largest quick-service restaurant system in the U.S. by revenue and the third largest by number of restaurants. It has more than 6,500 company-owned and franchised units around the world.

The company had 2012 revenues that totaled $2.505 billion.

 

Wendy's earnings and revenues*

 

-First quarter-

 

2013

2012

Revenues (million $)

603.682

593.187

Earnings (million $)

2.133

12.350

Earnings per share (cents)

1

3

*For the quarters ended March 31, 2013, and April 1, 2012.

 

Volume:85 Issue:22

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