The Wendy's Company (WEN) 10 May 232023 Q1 Earnings call transcript

Good morning. Welcome to the Wendy's Company Earnings Results Conference Call. [Operator Instructions]

Kelsey Freed, Director of Investor Relations, you may begin your conference.

Thank you, and good morning, everyone. webcast Investor PowerPoint Relations and available which call our on website, conference includes presentation, a is Today's irwendys.com.

from reference earnings the Before of non-GAAP we the we results could financial forth of may at Various is certain cause those will affect of the note our today's to statements. refer forward-looking release. disclosure measures most materially our directly non-GAAP some end factors measures. safe projections comparable at harbor discuss Also, financial to our presentation this investors begin, GAAP our set statement that in information please or of the of that earnings release. should This Investors take measure comments our forward-looking. and reconciliations reminds today appears end in the differ to results

On Officer, call franchise Officer, and Done review Executive XXXX Chief there, quarter President the Todd business first we health our and progress up our our Penegor, Right questions. against our Chief update line today, share will provide a a From Good Plosch, will there, and outlook. our From open highlight give for conference reaffirmed update, our initiatives. Gunther results will Financial

hand over will I that, With to Todd. things

start morning, outstanding Thanks, to the system for the momentum proud Kelsey, building and everyone. an of year. good on to XXXX we am I the deliver Wendy's created in

to experiences sales sixth high-quality with and consecutive food, restaurant same-restaurant X-year double-digit on customers continue of global a growth basis. resonate Our and strong programs in quarter marketing our great on resulted our focus

in U.S. growth was by business, reaching Madness March acceleration significant mix. our markets. During digital very across our over global This drove successful the sales first a we of international continued the our quarter, XX% and many supported digital growth in messaging

quarter. remarkable over highly first an to throughout elevated contributed margin, is the which in company-operated year-over-year growth expansion basis XXX commodity line top inflation as the U.S. point restaurant Our remained

and globe, to across goal XX year. also our development opened the restaurants we for achieve track remain We the new on

and our And our We interest long-term the development in our confidence growth continues remain new commitment three successful our the that and of expanding restaurant to economic programs. our we to suite XXXX accelerating and give momentum, fully deliver growth remainder driving digital our us This committed year pillars: and start for driving footprint. bolstered existing of global sales will franchisee by beyond. to meaningful global through the model long-term business be development confidence

on X-year our same-restaurant first in XX.X% and delivered growth strong basis. achieving basis global expectations sales a the on growth quarter, We X-year a against X%

with International a achieved double-digit of on sales consecutive another Our growth X-year of eighth quarter business outstanding XX.X% and basis. same-restaurant same-restaurant sales quarter growth an

with customer to regions We across see increases. double-digit our same-restaurant largest delivering count strong continue market, all international sales Canada, results and our of

the business the breakfast Canadian Our by supported prior of accelerated quarter, French our launch Toastix and versus promotion. croissant

at another burger along than daypart, share growth led with of gaining the faster continued breakfast rest competitors. strength, the all traffic and quarter Our of in market QSR dollar Canadian day to

share traffic growth growth strategic our Our benefit holding to and actions our gap the our continued burger widening U.S. year-over-year by pricing results of underpinned These customer alongside share same-restaurant month of and competitors. dollar the within business X.X%, sales were delivered QSR quarter. of count the strong category several each

years. the promotion of official March NCAA, value point its fans beef leveraged We compelling hamburger last crispy french and Our with highest as successful fresh iconic and behind like business to makes reach hot offerings $X programs our marketing QX premium hamburger the our driving the our millions to messaging $X Madness several for in of fries.

QX of lean with into croissant with quarter the in the our front, continue French On we Toastix entering start momentum. of closed to the the promotion, breakfast strength an and uptick

restaurants, our to customers experience more drive programs brings committed back we to are often. that more an delivering strong them our As

year prior restaurants scores prior excellence customer versus markedly first improved sharpened the service satisfaction and as Our on systems of even were quarter speed further. and better operational our improved and focused quarter staffed, turnover

to and second to promote can the heat will Bag Ghost and variety of Pepper only a platform, Sandwich the quarter, products of we the Strawberry dedicated favorite Chicken Crave we Biggie As with lineup. with behind price of Ranch to occasions the ownable our fan Made addition across the the turn bringing our like return messaging points Wendy's Frosty

have day, place of to the the in accelerate bookends plans our momentum night. and also We breakfast at late

U.S. into drive our the our and We offers. have Canada trial-driving building playbook increased activity targeted promoting year the remainder to and exciting business menu craveable the the launching awareness innovation of products, breakfast for in of and plans for lean will around

Furthermore, we diligent to our preparations great customers after night will have to business plan a ensure late Wendy's promote this summer. experience,

we hours, local saw quarter, to by first an uptick the normalized more business. late-night already delivery late-night our and the advertising at During growing a return daypart, in sales driven

excited high-quality there's are We late believe ahead us this experience ton opportunity they during and our deserve offer the night of daypart. to of customers a

to executing underpenetrated same-restaurant continued dayparts growth calendar, mid-single-digit strong improvements and to expect our that into operational continue sales against will ladder global leaning We marketing and XXXX. in up balanced

XX% to XX% over sales accelerate digital sales Our Global digital grew mix. quarter heights business and continued new year-over-year over this to reached as

embracing increasingly all-time accelerated quarter business leading the On an digital over achieved are every month digital sales sales to digital US mix our our customers nearly International high side, our options digital as we the In throughout XX%. ever our of mix highest US, many the XX%. of

programming as our our and delivery successfully advertised alongside once and the versus again the active in quarter. mobile gains value This users partners continued third-party in across our was loyalty nearly digital options March prior drove monthly XX% Madness we tournament. growth a This by order sales members delivery X% increase and increase driven compelling offered a in total

experience seamless coming keeps we a As more through also fans digital customers restaurants operational drive that into back. are delivering our we on ordering,

prior our time wait our delivery increased accuracy first and scores digital and sequentially year, the order quarter, During customer improved. versus significantly satisfaction

As enabling established new significant programs digital a phase set our to influence ahead, key last have quarter, momentum the strides We infrastructure in all and marketing meaningful we driving made place a we allows behind check benchmarks of experiences and one-to-one our excited shift behaviors. of look into are adjust to in This against us to team personalized in more to user frequency. quickly service increased of growth.

a Lastly, generative opportunity believe drive-through experience for technology. our partnered that faster solution Google frictionless to I'm pilot We our members service. to creates solution making us AI Google language a and to allows with for customers for have differentiated, share AI, excited this ordering and models huge a AI focusing that Fresh food crew Wendy's Cloud's utilizes on deliver to exceptional continue large voice providing and truly and we great

We to potential over launch pilot could speed that profitability June are plan to time. service, drive this unlocks customer and satisfaction this excited about in and of the incredibly technology

alongside as maximize this approximately You restaurant us look to and and the economic can our to expect grow digital model continue our new billion $X.X technology partners to pushing year. we into promising sales

opened track and development are for the XX year. global restaurants reach on to to in new We goal our first remain the quarter pleased have

quarter open our We through on pipeline forward our underway which the performing are XX or end approximately XXXX under of building success that drive-thru of the format We is with closed in of look ahead the second journey so the to In drive-thru restaurants, expectations development market, U.K., XX% to construction first restaurant on open second quarter. our including planned in far. with our the well QX. with we

increased seeing around are of programs excitement and We new from development our both existing franchisees. suite

growth our and to and for begin an system as beyond programs, XXXX across subside. pressures to expect momentum continues increased appetite market we these throughout continue We sales inflationary

place support X% have global our goal to plans unit the believe We net in to of XXXX. to in continue we growth X%

longer delivered the permanent second in of unit We growth in time of year, driven lines permitting U.S. closure planned addition be construction remains the the quarter. of development and will REEF the expect second all by primarily net our the challenging, as in our to environment restaurant restaurants half

global growth net of unit to We also to X% targets on to our X% XXXX remain and X% respectively. track achieve X% XXXX, in and longer-term

all more to of opportunities are the that's growth the of even and about around globe. us We the delight customers excited ahead

building over foundation it wanted financial to within ESG has an turning of Done Good our GP framework. to done on the proud goals our the team business. results, I update to against and progress to food, Right cover footprint last over am into year goals our advance these continue I our Before of share our and our the work people

and inclusion increase pillar, people Own standards advanced collect began and and criteria areas partners from Your launched program. to we and candidates. expanding developed information food accessibility campaign franchisee our our diversity addition Within to diversity, our responsible sustainability both key our equity sourcing Opportunity pillar, supply our animal welfare we in Within the focus to across

Footprint than within we be finally, pillar, schedule. ahead our to more Science-Based customer-facing a of our and Target our validation sustainably received And nearly of sourced packaging XX% transitioned year of

for encourage XXXX Relations all recently the progress released over on information. read we've to a the website just is and sample year, Investor made of more you This past report I our corporate our responsibility

rooted deeply pillars economic growth our Done framework. Good the model the and strategic in Our of foundation remain restaurant Right

focused expanding momentum, business, that with at most focused is our business the momentum way. life well business: world's restaurant remain accelerating footprint. to we of ahead, the thriving we sales the most have drivers And do growth behind same-restaurant delivering on digital impactful become global in our we accelerated we our are bringing Looking beloved to Wendy's and our on vision brand. Everything on global driving our and our

hand to I will things now GP. over

from on I Canadian share XXXX US Thanks, time health update recently collected financials and to as this wanted to our franchise Todd. franchisees. we take an

and reminder, led XXXX franchisee focus both in to a profits record economic restaurant and our As the driving model Canada. sales and U.S. in the XXXX on

XXXX. to Turning

inflationary and Canada. sales remained the XX% another year-over-year U.S. and contributed franchisee record in sales Canadian year-over-year EBITDA in This growth X% Our over the U.S. comparisons, dollars growth, XX% U.S. versus to with higher X% XX% in unprecedented franchisees Canada, X-year XXXX, respectively. headwinds which XXXX over in and and year incredible XX% achieved pressured of respectively. despite and And approximately of

digital franchisees we acceleration footprint in Just sales our eases, momentum as restaurants, dollar as will return same-restaurant expansion. we to EBITDA drive and to global growth in company-operated expect and supporting continue on we EBITDA expect XXXX expansion inflation our

Now this which profitability let's quarter to results, financial showcase the we improved turn our first year. expect

growth our proud our incredibly of execution first financial formula. quarter sound highlight the strength which are results, of initiatives and the We our of

growth global XX%, our sales Our to contributing financials. systemwide across year-over-year grew

labor remaining increasing higher a inflation of of of was average expansion U.S. company and pressures X.X%, respectively, Our count margin pricing and over offset decline. restaurant and year-over-year driven points the X% primarily check reached XXX despite customer cumulative benefit X%, approximately to basis by This elevated. XX.X%, inflationary partially due commodity by

G&A prior information flat in held The million, per arrangement the EBITDA by Adjusted by the higher a the driven higher decrease decrease U.S. company-operated costs. expense, interest technology in income. compensation a revenue primarily compensation approximately restaurant investment incentive cloud and higher versus margin. and due in were EBITDA increase interest royalty over increase share increase and higher to costs higher was in accrual. of year, computing in offset $XXX franchise earnings by These higher almost by a amortization increases to adjusted income XX% and XX% driven increased offset adjusted partially stock primarily

decrease million, payments resulting noncash of of first increases offset by $XX free increased and to expenses. payments XXXX. primarily in partially in for quarter income These first of in flow quarter rental incentive adjusted receipt franchisee net the our for cash over Finally, a compensation were the timing approximately from higher the XX%

outlook unchanged. XXXX Our financial remain long-term and

X%. We mid-single-digit unit to sales X% X% of driven global continue of global significant same-restaurant and expect year, growth global to X% by to sales growth system-wide this net

million of labor we of XXXX $XXX and US expect Our company-operated approximately as unchanged inflation. sales, XX% to line restaurant adjusted $XXX XX% and remains mid-single-digit strong to commodity million EBITDA continue margin outlook top to

for the franchise and rental net of than less year. approximately $XX $XXX Additionally, we full fees expect million income million to continue of net

our expenditures $XX to of outlook of flow to EPS $XXX are million capital to $XX XXXX $X.XX cash million $X, We for $XXX reaffirming also of adjusted and million million. free

our in flow free reaffirming and annual mid-single-digit we growth sales long-term growth annual high of further single-digit to double-digit Looking system-wide and outlook XXXX XXXX. cash low are out,

driving the term Our of momentum business our model reaffirmed long the pillars. behind of and is short financial and a over to economic outlook growth strategic our result dedication the restaurant our

continues unchanged. asset-light close, first like model highlight while capital To allocation to to business which our to our for I'd our holding policy, true Investing our remains priority. be growth in

second our our attractive of declaration dividend. sustain the which dividend today to quarter of with share, announced aligns we Secondly, $X.XX an per commitment

dividend $X expect an dividend a over year represents full XXXX, in ratio. which of to XXX% continue per share We payout

will and we shares utilize repurchase to Lastly, debt. excess reduce cash

repurchased and in approximately repurchase of million million As million of $XXX have May our $XXX shares X.X on X, we February have authorization left XXXX. share approximately expiring

through Additionally, on remaining we our of XXXX. repurchased in February May authorization debt expiring our approximately X, repurchase leaving debentures $XX $XX million million approximately of

flexible Our deliver as macroeconomic to meaningful headwinds elevated leave balance cash continue sheet withstand balance strong and any to and well global positioned we growth. us

are fully We simple our to continue yet formula. delivering committed powerful

dividend cash We significant global an through share and backdrop expanding and growth This shareholders meaningful investing cash free sales driving and is sales translating that system-wide our efficient pillars attractive accelerated, same-restaurant are on growth which flows, return company an strong of of our the is supports growth to into repurchases. in footprint. positive

over With share hand that, things Kelsey IR our will upcoming to to I calendar.

we start Guggenheim JPMorgan XX. XX. May Conference New by attend in in by on NDR on Thanks, Conference May XX, Virtual the with on Boston an June XX, June off, an GP. Virtual followed, York Oppenheimer To we Evercore followed have will the NDR On things with

investor host calls and respectively. XX RBC XX with also will June BTIG, and We on

interested respective host contact are firm. these us sales joining the of any analyst equity events, the contact or in at you If please at sell-side

second same and host August conference Lastly, our call X. we to that earnings quarter day plan report a on

that, our we ready question remind due we Q&A a limiting wanted into With to that questions. everyone to high transition be are I we As take one section, of to covering only. everyone your number analysts, will to

[Operator ISI. today comes Evercore with question Palmer Instructions] David First from

I'm to traffic, market energies be do You you a and the the between your lot and of rank to prepared think remarks. you for it, innovation mentioned energy potentially your in then biggest bang talked best that of driving -- digital think going are applied? call could applied your you if what about on sort initiatives. in you sales the some do just terms where to wondering is going marketing, be share going and is the you renovation Where And what buck? give

thanks David, question. for the

balanced it's across things. several think I

We've rest drive opportunity think talked today. game We know business we're prepared staffed grow year. to news continue operational better good nice have to We've really to breakfast And the got our excellence, opportunity of we late remarks. to of we as the remainder some to year. for more this day our we about on I into continue the some balance around feel opportunities the part. night to on got the coming the raise calendar our continue the in of

Some great and with value and throughout $X commitment Bags. $X to coming a the new Biggie year, innovation $X

on our nice drive think that I calendar to a balanced do digital. business. we continue we'll And So got to lean in will continue

experiences. even each to got to period digital the QX. Our coming grow to like continued within we are mix feel better consumers better tools create in to connect momentum. life -- We The to some

rank customers. throughout experiences of need crew drive come all great for because continue will the year, a to in But to got I us hard allow to and continue the to to to together of we've them this our visibility. drive and lot that So confidence growth mid-single-digit they quarter-over-quarter-over-quarter that rest think

comes Stanley. with Our next Morgan from question Brian Harbour

to those just year? of wanted the get expect? the about the many to just the through of on trying year for XQ we're guess related? development. X% you in you X% target I more to do more pace And how Could think of I the of full kind closures ask kind as about comment development I'm we to

Yes.

closed. restaurants of had We had the specific, REEF a on REEF So quarter. temporarily only closures in U.S. couple several first we

maybe So year, closures quarter to for the new than in quarter, look our in U.S. you'll XX XX the XX way in The internal XX with the that first open year, track REEF calendar quarter, is restaurants. number. historical last lined averages other our see typically, first we've at on up restaurants, the of second this The you always we're expectations.

XX% back get quarter, of loaded or sight of closures. we open those open It going good openings, construction. the we to And preponderance But as is on restaurants of with on is loaded end front-end we're second of the got to construction. the those have end or line it under the vast under now the

But So we'll visibility to you to that. got the X% underway be year. to net able on that's work plans this X% the unit we've report growth back to deliver our and to

that. about good feeling we're So

We now Oppenheimer. turn to with Brian Bittner

you late that the in interested really in a the heavier the driving actually prepared I'm business. on much remarks focus night comments made on

the the that of unfolds, you up successful, can about to if night conclusion what help size year strategy? is could the you what could made just where that And is on talk that Maybe frame drivers late the of targeted come this business impact you us right As the go? the or upside sales? it can and have the could type size -- understand you think frame today you

us for is we've in we success. what in system in the at night when a and are rest gives some there opportunity. Well, restaurants, the late confidence? company company leaned while the We've restaurants of look on relative great we an where to We know Yes. the seen

with comes that our of Some operations.

of staffing we result having that need. not a Some of the is

to position business delivery give over in month lot in on first all a of month the do but not with growth traditional in got continued we're that staffed at we we've as do drive confidence that only late appropriately, -- significant and month what delivery that look that we that the momentum really quarter, we over now business drive-up a with through daypart. to can ourselves those we But we know the us where business, the can our period have is, what to night customers, drive-thru continue grow

continue I and quantify. when to we late going hard The look work you've is where us. be we will But the hard have to have been some big in some of growth we'll continue drivers, lunch and too at those to one those growth prize, nice And to one. size for be to seen and continue dinner, win at like start to breakfast night of to dayparts

Geiger comes UBS. question next from Our Dennis with

commentary could. profitability helpful. on is development, I on the one And certainly if Another franchisee

Just to current development side specific wondering in of environment. the things, the franchisee on demand

and development specific could you of could there's if headwinds getting more offset to of on that a if incentive Todd, programs, you're feedback Just the the relates some anything mentioned bit more kind on there. size macro as up those you it drivers by what share particularly franchisee you feedback

Yes.

On the early. development program, still incentive

So take a lot of education Pacesetter, program. going opportunity X.X, on to advantage on build-to-suit the what have of our Groundbreaker we continued

So into we'll more and have a economic Clearly, visibility attractive are QX. lot the in model. help incentives restaurant that they

momentum we've about with improvement forward digital that's we the excitement global in restaurant our certainly to that continue And some got the helps see costs and With restaurant, XX%. quarter-over-quarter design, X.X Gen next into future. our that create margins, down

So of see with all the we and you factor growth, take versus all when continue want wage when our consumer lot to factor nominal where about of inflationary you're model, of advantage opportunities. can start those think see in going all lot lean a think prior the they're to the of those to strength to to of pressure facing of a side I franchisees you you'll of the the those together other on

digital comes consumer, restaurant it design we're to other employees view, voice restaurant the the advancements digital drive continue those next-gen the menu things forward into to to help and when and the economic restaurant, can working AI boards our that and on all connect And technological better that with model. that

Joshua Long comes Our with from next Stephens. question

thinking within inflation consumer overall to pricing labor you quarter. can as your that we comments? the the the your Was forward mix, strong side down was with walk sounds components additional but there. during for are pressure is hopefully of about but think little moderating, if about the traffic being same like still could you a there, year you the It on vein, comments, talked bit, of being prepared the traffic we how context relatively just business curious prepared through get And pricing hoping

in X.X%. was inflation. you've remarks, bit a X% little below about as so was Josh, heard SRS U.S. the the food-away-from-home prepared up Pricing for system,

a little are caught rounding. in bit We

pricing up you mix the you little bit negative a was below actually numbers, If little traffic what look a X%, bit find is was will X%. was at than less exact slightly and

you reconciles single reported. add up, have it X.X% traffic So all the when every note It's the we really was important growth in it to happening month.

really and there, of January in comparison easiest February grew the March. We also we weather. but kind and Omicron was traffic expected, Remember, that traffic grew was with bad

concerned, As with our is more a far as first of pricing kind X.X% bit up company caught versus the we obviously pricing We the quarter. in, lean in position in little franchisees. on

year, for total quarter. pricing year about you It's If we X%. talked bit look the little than a the is at last what higher about

quarter, is we talked Last in us carryover Remember, about we accelerating is a position. pricing are better pricing, put the X%. even to difference about The X%. little bit

I think So the And a new here. again, price lot. is pricing in the is pudding action proof -- the not the

seen not in have and have and by pricing category. traffic in customers from resistance holding we the growth share and traffic dollar the first seen we have the our as We quarter maintaining that on taken, actions the evidenced major

Silberman Credit Lauren with We to Suisse. turn now

expand I behavior can with signs of you just to if ask check what consumer on want you're management. seeing

negative. over mentioned different across you if you mix was $XX,XXX can seeing that then just $XX,XXX about consumer you're talk consumers. think cohorts, what and I And under

above and in an category actually maintain income contrary, consumer point a programs. In in the improved the and to share have we the I view, view, level customer our scores year-over-year. not in well gone single-digit both yes, income growth of is reacting satisfaction point the of quarter-over-quarter perception, Lauren, said, we have why we as backwards. From That's high cohorts. cohort, $XX,XXX have From below value our quarter. income

on interesting it's income cohort. So the

cohort, growth there. consumer, and to $XX,XXX nice share hold If you seeing under is $XX,XXX the the relatively nice about maintained flattish over think there. traffic we The our good the we're we've is with share continue but news

that in participating So growth.

question comes Cowen. Andrew Charles with from TD next Our

your laid looking the Todd, how help value beef And, expectation comment volatility can GP, particularly efforts. Biggie Bag, your is in on inflation inflation to understand weigh call? potential mitigate for XXXX potential promotional versus cost what for strategy, better as impacts out last to you on you this might I the guess

commodity the outlook previous unchanged so we is versus taken. our position have Andrew,

So it's mid-single digits.

Within the in versus basket, is bit more categories. commodity to goes our was out XX% a year. I we saw commodity Beef food that XX% favorability bit little for of expensive still little deflationary a offset of beef us, slightly other by prior movement. That would also basket. point about

price We first visibility inclusive the have third eight and quarter. the now of up weeks of

expect So that have open. inflation more we little commodity there be and a guidance Could with very is maybe. not do reaffirmed. a bit confident elsewhere, there We the headwinds, offsets lot that, mid-single-digit

Bag far think support that Yes. Biggie where to to hamburger got continue all. system visibility aligned and to news of And business. nice and $X the don't our And $X into some We've we continue we plans we'll as around in to impacts we've the there. premium the as at calendar, promotional with the lean we've what the side good got really want on

continue play to in lean And game. continue those we of you our with work equity did In and on beef. core that the our the about we'll and hamburger think really items, to QX, able that equity lot a crispy and hot drivers we'll difference were the our and those focus points unique have, to squares we fries, when calendar we around on

with Jeffrey from comes question next Barclays. Bernstein Our

pushback the get liquidity maybe to leverage up -- just sales And encouraging this ask post-COVID, the I Obviously, points. and ability topics and you unit that potential it's wanted the see your just are recession. of discussion position I'm greatest sentiment on to and to but there? environment or friction franchisee could support if primary pre to what pre-COVID what's about to of franchisees' levels, that franchisees. wondering borrow growth. the compare sentiment but franchise profits a just versus lot questions in are primary relative outlook We

U.S.; news to in the model. on continue stay builds? enhance to both the with reimaging back to our accomplish, Jeff, And great into the continue Canada, relationship hip strong discussion to restaurant franchise in a continue here that we've our and economic to trying drive that's do advertising got is and what we're back on linked we new through the working sure trustees margin the into our in what area work focus how is all can to we'll technology invest into together. time, the we of That's and we make people, community,

making are We progress.

as mentioned. You're right balance more environment a that calendar, really with more seeing sprinkling do value, promotions that price just through I that between and point find focus quarter-over-quarter and highly inflationary the well of break that we'll balanced to high-low visit and and one continue lot one in a dollar as of a some on core, as

about restaurant a the on theirs you. driving debt our we've Around I'll ratios versus economic lease we got ratios GP, good partnership, is adjusted So to model. it over turn that but feel it and side. leverage like

X. happened. ratio, leverage ratio have would a slightly the north Debt of the has Yes. acquisitions with The the below leverage will make the XXXX. rapid company levels increased all progress that on I have of definitely that, The so about down. versus system to is slightly increased system say leverage take X.Xx,

You We are our from can mid-single-digit forecasting sales restaurant company outlook, growth. see this right?

U.S. of long so margin as north the It's of you growth profit our that's prior can you math. XXX the go as well. the to take take will an a do year double-digit guidance, leverage way that midpoint in of system versus If basis down points, expansion

We now turn to Jon Tower with Citi.

awareness the as get come to as weekly customers. in curious the Is you high coming they're on color from settled in some quarter? to Can Is you've talked drive And frequently? sales where I'm past it that it breakfast points are us core today? out relatively of aren't idea I would price looking it for you of side? your more Is of frequently I'm them But than more being customers they for? curious, breakfast think to are they what service? why what that. give of average an those about specifically, just hearing speed Or kind around something the product your

mention, be quite Yes, awareness did on as breakfast, John, high. continues you our to

is more think couple a to to to of satisfaction, overall drive a nicely. that's breakfast an looking doing There's got still and opportunity deal. of core regular got value, on continue a speed continue we've daypart. in drive going to satisfaction quite little play it's a us. on But we're to are helpful. do the only our highest come consumer consumer I like product $X I and if sprinkle which things that think We've croissant to for more We've to a service, having things got overall from to on QSR there's basis certainly

to more to we're sure got competitive make continue that make we've to So to on we And to front. got sure complete business. going a we're have that continue beverage

growth breakfast You the businesses, continue look QSR around in over last whether several quarters, beverage lean coming about brew, the We'll the heavy in. of we've it's Frosty or news cold to some talked in daypart our elsewhere. past. at got a in with those We've lot which that's burger the

at numbers doing of to longer in. to side, plans think support rest brews, feeling giving as on And on I'm to what we we've are and year, calendar where going But innovation doing I that those breakfast the sales on to that around the have confident pressure we're look we're we're breakfast those rest for lean of in business what our compete weekly value, the daypart. the really I got for that continue well. no year, place So on Frosty we're the continue the some the we to cold

with Chris question next Stifel. comes O'Cull Our from

speak be is think going little to and later a Wendy's growth bit system start you then whether this more does price the of And you regarding customer could pricing thinking off Todd, achieve increases? growth positive about this count larger comp year, roll when to year? some needed to the later

Chris.

margin lot need pricing get So said, as structure. to right, of we attractive don't we a into

X% on yet the the a between as comes year, is later. pricing said, And not a carryover pricing gap and bit have that taken year. about pricing this new I We the little the new

not action. it's So massive a

are for If sales the at you while do pricing our forward, come growth. fast yes, single-digit low down. long-term it's We and levels SRS 'XX we will saying, guidance think you if basically 'XX, look

As a the we result years. are it, flattish expecting outer in of traffic

we healthy. drives the to see free in outer years the be economic single-digit to our have outlook. our restaurant reason And no in restaurant it low double-digit focus why cash it's the high With think that then, construct. model, flow obviously, I we that all on So expand going our profitability further with shouldn't company

Chris Our comes RBC Carril next question with Capital Markets. from

on more bit remaining I a maybe development maybe expand system. that of of pace you unit provide you global the new it's about as can to program reimaging? And down? can what the that a XX% tailwind think the think So extent winds to reimaging

Yes.

into which the our XX% a global And to quarter exited system reimaged by little have remember, the XXX% slip That XXXX. originally, goal we So our of could is image with system progress. activated, great bit XXXX. was full

the and new extra Pacesetter reimaged. year a focus of reimaging, of lean rework to advantage an if is to to to you hard incentive, on development franchisees which choice wanted take we continue their get you your in to restaurants work our and can make all So get actually

free up capital that invest reimaging, be does that, the as to driving new I over create and do restaurant not model on opportunities does back just hump the get also we the development those around into technology people. but on it economic things to capital for think focused

as into then even So in fuel the gets more model restaurant spin economic future. that development stronger even those things stronger and top

Gonzalez question Markets. next Our from Capital KeyBanc with comes Eric

franchisees? Maybe that I fully late are think you pre-pandemic we about daypart you're was talk profitable to to more of opportunity is engineer And maybe for in versus what or wondering, your efficient, you levels. And mentioned is the done sales daypart similar currently at the on where another I there an menu traffic or opportunity. you've the terms make staffed. to night breakfast? value one Can the

late at it's back you -- is traffic prepandemic levels. at overall it night, to Eric, pre-pandemic Yes, when look

late-night to sure and at to that Our to effective daypart. opportunity should look be drive of at a efficient great make we're food the is and that our lean really that what in to part. menu late-night throughput day like getting We'll continue fair to take look that construct share at

business. lean that support continue in that what to opportunity look how as come and to we we about So like should to think should menu

When and to had. after be and the go we you XX staffing profit the when about profitability, dining look traditionally you start down model, a of lot late-night think at room where shut get into is to there a

close it the we you contribution a how it breakfast model. can menu so even your make restaurant economic circle. easier So And it to transaction that they more at the do the we'll at a then to and it to opening virtuous look the when make with existing too menu efficient against to really in nice be look it to can takes, make the make model sales the to better morning night business continue sure support provide the continue you construct, around labor

comes Our John JPMorgan. from next with Ivankoe question

that to we've the terms QSR in shifting is know about term is well about mean, you which below relatively the which pricing -- near that we I you restaurants talk Can excess be to of just biggest obviously to restaurants? total will spoken general, specifically. being competitor maybe before of I from maybe in pricing grocery in meal Can category, the share. in category,

for outcome any risk guess like And slightly category. there's shift to from to a into positioned and the other be kind lead grocery maybe think do best away back the how share I you prices grocery If or gas yourself share might to real different would this like keep time. to factors of you potentially employment,

see, to So be John. it interesting will

home consumed XX%, range. pre-pandemic, that was I XX% think you food running at

XX%. the at pandemic, of It's XX. the in During got today you kind settled XX,

lot like a not taken stage. the it's shifting a meals There's still of into folks of we've home. at advantage of back this lot restaurants at So folks eating

the the overall the price there's lot been at years inflation look still over several You a the point, look daypart. grocery convenience, in of you last at

$X on Bag, create lot we value Made value can we about Crave, $X grocery, have the a of and a a or to convenience. of think we single on Biggie a constructs Bag, Biggie lot against still like you And a relative drive a freshly meal prepared

are, things think compete. and those or GP? to help getting Anything start think what and to will about to out get positioned And get the environments I that's push their breakfast folks to their patterns -- continue else, to what and we're try continue -- So back overall, work, well whether restaurant to are hybrid as continue work lunch. business driven miles

expect coming a correlator. big I that also wage inflation down is disposable would still I right, in net big, disposable is high. because would And say grocery, come Yes, net with will income income relatively inflation up,

more spend disposable consumers So our our bit compelling. as a the little go our us, consumer be to are is hopefully, it them to left good with encourage business. looking should more and more then quarter-over-quarter, offerings it there restaurants money. And should income, for with net and I be really often and should They're for some think the

now to for Guggenheim. Francfort Gregory We turn

any entry-level if of comment GP, I rate you're at on labor turnover levels update market think starts you staffing us maybe to up? you're all starting wage free see the as Can spot. and seeing better maybe you to in made staffing a what break about on a being just much early on

XX-day What's definitely Greg, rate definitely looking turnover the The have so levels year-over-year quarter-over-quarter. staffing metrics has at? are we and improved. improved

the time prepared difficult night. night. in an good levels, periods staffing remarks, going that about to we are we even advertise staff in to late heard really That's indication late like You've feel

definitely confidence there's there. So

Our what was asking, really environment We increase. the inflation massive first X%. seen labor in quarter not mid-single stacked Again, on about in digit, a right, that's you a were have labor that if that's basis, deflationary

quarter remember, in first might inflation was wage XX%. of you year, If last the about

reliance you on How are that's we this? do And we So the trying do obviously, have. labor. that environment to remove our

can. -- as then voice best our benchmark And helps the the economic rates as retention as of restaurant drive is ordering anything in push so also competitive you and From digital, productivity are digital with industry, than else? as better Todd, point Obviously, possible restaurants. obviously, AI towards view, the a fast that model. turnover helping

you seeing seeing improved it taste, quarter-over-quarter. significantly perception. all is accuracy, seeing our as the benefits been I that, it of We're at all of where satisfaction it speed mean, across look seeing we've GP. across That's staffed. You're better we're overall our we're across

Importantly, we're seeing speed our actual improve.

lean and So better staffing much that all with what across of to crews position about. continue into is making quality improvements with game play. dayparts. is game that being affordability us better convenience, a certainly on as the our all to will better Speed, all labor Differentiating on front. we're is going in trained help

America. Our next from with Bank question of Senator comes Sara

I couple Griffin of Sarah. ask AI Katherine Todd, is a the about This for to questions on wanted investments.

more this labor right unlock, do the Firstly, throughput you why investment? you -- to the spoke be on do making secondly, time side to the you is now when side? expect about the And that cost or operational be on

Yes.

really restaurants. a with we've the have is to can menu next-gen ago who board. We've all starts job got Vasconi, tech even design. work We've right it technology. forward. even that several the work and on his continue our nice digital joined of digital ourselves on on done setting up do global to now lean we That's Clearly, us time. had stack think in and Kevin Domino's, more the now done I team years a from And lot our

us. that that's language We've Cloud. when growth generative testing believe and in you But technology. now, in is of models Google front have why we large it partner it. in We a at AI look So been still great their

order better a that expediting live We'll a window point out opportunity we great Slowest in us. lives for make the throughput trying for as as in our speed station, really better for and little them have on whole in and and our heck it pilots we of a is bit area. as our here food a at get restaurants it And in the making look really drive-through couple June that Columbus of lot this a employees to super-fast. focused customers

the where really employees elevate moving forward. and the to that's So lies, both experience customers opportunity for

Jim from Sanderson Northcoast next Our Research. question comes with

late to night? I Are and in just where operating expected stores commentary expected? make wanted on night Or operate just or areas to to franchise your breakfast hours check in there as to regarding are wanted and cannot still I the late operating Just U.S. opportunities capacity. follow up fully stores on understood. sure

night hours, if until weren't I the there. And restaurant until of prepared we heard actually now up business midnight the lot opportunities. in when or remarks, ourselves having months, your mean, you for get last put your dining about later, back midnight all the XX, nationally go we've still rule advertise done think way late you to set XX Yes, or late you over having later. work, open as a open to

the the we'll that to of in system as position So have we vast into summer. do roll the a preponderance

to Bartlett with now Truist. Jake turn We

the on offering. is value Mine

difference. There's kind hear a value something that mentioned of versus And too core One, kind that are mentioned looking Biggie from think Bag problem? kind I offering for $X. $X. you're of away -- you the or to to And address? of that some too for franchisees then is was kind that thought that $X, is view is a of the menu. it I just You that soon. actually that want something keeping you feedback understanding attractive, is confirm, I at is $X at is going Is four large four the that the point, one you it My

Yes.

$X Biggie you folks to Bag. Bag $X if where think from So are, we trying Biggie we've to about for been to $X move four

and and as we've through The local four Bags app. with the stay offerings some we've the manage is there. over Biggie months. the honored if been really menu have that within the to $X course last has gains we shifted folks is board, of able nice for off can mix the $X menu the offerings across come still the still on it it you it drive decision. to a So you several been Is those going board, on it up $X, restaurant, focus be

around for $X, four to comes overall our it mix it's when But look if relatively and been $X, you $X stable. value at

a So trade lot seen down. we haven't of

and We but probably value are $X that for really five how you actually just sprinkle discussion right make with age-old like trying we an sure But happening in today, balance between other And watching is premium. value $X offers same to years ago. that It's gap we're not got in things do between we and premium. the the value between like that. had discussion

have tell in Crave quarter, advertising, to with core hamburger you that Made the around the best had core, and equity I'll we volumes news we the in the first all our large years. what, And last hamburger our six

on the really about premium side. So that good we're feeling

question Our Wolf Wightman Fred from next with comes Research.

There could quarter. each but give month, was It sounded just maybe some trend the a was the weather a in wondering I'm January, of you positive comment but if there on throughout how little earlier basis year-over-year year-over-year traffic like was a color. bit that

said, month little quarter, of of I than for the quarter little was remaining So traffic bit the as for obviously less little in January, bit below. the the And a north a X% X%. a bit of

comes with Saleh today BTIG. question final Our from Peter

side really the labor breakfast, it seeing your service. like speed commentary you faster of need on the well. the on guys Yet sounds seeing as on the improvements board, industry are and across It to indicated drive is you

I think was that comments. first one the of

improvement there improvements the side really of that something helping of across Just the Is in you need to the else are So service drive just you seeing do breakfast on understand curious, speed dayparts? seeing you're is to or slowest? speed there's all if trying to service the labor there?

and speed that sure fastest rush-ready. be. continues and to breakfast do reliably our our prepared be of continue make Yes. From is breakfast to we're for lunch for perspective, as service dinner a and speed we the daypart to of to that are rush, just got we But service

that that comment consistent just of one continue experience. things to is. deliver where It's that's a So the

into are the pipeline to into those some future. our what in factors do got into the more beverage expand news do even will things continue think around offerings, to around to right other breakfast I now. bring we've do planned things food, the continue business our do And play our those we growth how we that

Have Thank Todd the GP, again morning. thank forward this look was the you, That participating August. quarter call We on with a you, everyone, of and second call. in question and Peter. for day. you Thanks, our last to great speaking

now disconnect. You may