DUBLIN, OHIO — New products and value deals increased sales and traffic incrementally as the third quarter progressed at Wendy’s Co.
“Category traffic was challenged throughout the quarter, and this impacted our early results, but following the mid-August launch of several successful innovations and promotions, we deviated from the category trend and achieved positive customer counts in the latter half of the quarter,” said Todd Allan Penegor, president and chief executive officer, in a Nov. 2 earnings call. “This led to an acceleration in one- and two-year same-restaurant sales growth each month of Q3.”
Globally, same-restaurant sales in the quarter ended Oct. 1 increased 2.8% on a one-year basis, including nearly 8% internationally and 2.2% in the United States.
Net income of $58 million, or 28¢ per share on the common stock, was up 15% from $51 million, or 24¢ per share, in the previous year’s third quarter. Revenues increased 3.4% to $551 million from $533 million.
In the quarter Dublin-based Wendy’s launched a loaded nacho cheeseburger and a loaded nacho chicken sandwich while expanding its Frosty line with strawberry and pumpkin spice flavors. A promotion to buy one, get one for $1 drove traffic, too. Frosty cream cold brew and English muffin sandwiches launched in the breakfast daypart.
“We also launched a new value offering, our 2 for $3 Biggie Bundles, which drove a meaningful sequential sales increase following its introduction and contributed to an acceleration in breakfast sales in the back half of the quarter,” Penegor said.
Wendy’s hopes the value offers will attract customers making less than $75,000 a year.
“The over $75,000 consumer continues to be healthy,” Penegor said. “We continue to see traffic growth in that segment. We’re holding our share in that segment. Under $75,000 consumers (are) a little more stressed. Especially as you go down the income core, it gets even more stressed.”
Over the first nine months of the fiscal year Wendy’s had net income of $158 million, or 75¢ per share on the common stock, which was up 16% from $136 million, or 64¢ per share, in the same time of the previous year. Revenues increased 5% to $1.64 billion from $1.56 billion.
In Wendy’s 2023 fiscal-year outlook, executives now expect systemwide sales growth of 6% to 7%, compared to a previous outlook of 6% to 8%, and capital expenditures of $80 million to $85 million, compared to a previous outlook of $75 million to $85 million.