US fast food chain Wendy’s reported a dip in profits, and a slower sales growth for the third quarter of 2024. The burger chain also revealed plans to shutter poorly-performing stores to make way for a tranche of restaurants in better-placed locations.
The chain revealed operating profit dropped 6.8 per to $94.7m after it boosted investment in breakfast advertising, and had higher expenses and depreciation. These were partially offset by higher franchise royalty revenue, higher other operating income, and higher franchise net rental income.
Same store sales growth in US and internationally
Wendy’s president and CEO Kirk Tanner said “Wendy’s restaurants continued to deliver sales growth during the third quarter, maintaining overall traffic and dollar share in the QSR burger category.
“We continued to strengthen the relationship with our customers through our digital and loyalty platforms while driving growth for the breakfast and late-night dayparts.”
Across the network sales rose 1.8 per cent year on year; down from the 2.6 per cent lift recorded in the previous quarter. While international sales for the third quarter jumped 7.7 per cent, across the US sales rose just 0.9 per cent.
However, on a same-store-sales comparison the growth was minimal: just 0.2 per cent in the US and 0.7 per cent internationally.
Wendy’s store locations reset with 140 closures, 250+ opens
According to Associated Press, the company has 140 underperforming stores earmarked for closure this year but plans to offset these losses by opening 250 to 300 new restaurants in high performing locations.
At the end of the quarter, Wendy’s had 7292 restaurants globally, of which 6011 are in the US.
The third quarter figures show the brand’s net income fell 13.4 per cent to $50.2m, adjusted EBITDA dropped 2.9 per cent to $135.2 million.
Wendy’s expects to see sales growth of about 3 per cent across the global network this year and adjusted EBITDA of $535m to $545m.
