The Wendy's Company (WEN) 31 Oct 242024 Q3 Earnings call transcript

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

You may begin your conference.

Good morning, and thank you for joining our fiscal 2024 third quarter earnings conference call. third Kirk business and Plosch, update Officer, review introduction, will Executive Chief brief share will a and provide and our this Tanner, financial Chief President Officer, Financial our After updated results outlook. quarter then Gunter will we line the up for open there, From questions.

available Today's and is a Relations Investor presentation includes call our website, conference which webcast on ir.wendys.com.

certain reflects future note of statements. and information statement that reminds forward-looking the results end today's Before plans performance. forward-looking release. harbor investors discuss we appears we Various safe projections that begin, to our those differ the our cause today in our is of affect and set the please current disclosure expectations forth from earnings take materially about This factors and results could at

today's end will should release. today's presentation measures to earnings financial measures. of our of GAAP some comparable of the directly non-GAAP comments measure non-GAAP Investors reconciliations reference at this the financial to refer in Also, or most

you today's If conference contact me. have call, please following questions

now will Kirk. over hand to it I

morning, Aaron. and everyone, thank Good you,

I'll third to some of our Wendy's then September about joined with franchisees. aboard. going high-level on quarter, and the the start hand of GP brand over you talk working Aaron and performance the drivers more Relations, the company it and excited and Investor initiatives to have updated and our strengthen we in are us across results its operations quarter know, into I'm to to we outlook. to in we'll then him get some many to and As are lead

bit grew U.S., held QSR challenging the share remain than anticipated global respectively. third into sales the competitive as system-wide quarter. a which restaurants the we more our quarter, X.X% continue we the During grow to within category, been In as and X.X%, sales coming has and burger we traffic same-restaurant third

impactful items, our focused to by execution innovation also us for dollar core share demand value. team's craveable and consumer our driven Our relevant allowed maintain

The the continues a be percentage businesses. the compelling prior to and to in growing also growth delivery compared a high a year. to opportunity, night prior performance, daypart sales digital driven delivering momentum increase our by at compared strong morning Late sales single-digit mid-single-digit sales year, delivered

In in achieved sales new growth sales led nearly end restaurant high we our our a same-restaurant International driven International breakfast of by segment, by system-wide through third growth including traffic. single-digit percentage Canadian openings growth quarter. XXX high-teen market, the the was

sales about deliver enrolled, that segment digital XX million app user million to the We now have second at almost over XX% sales business. us of digital growth members Now Wendy's was quarter. supported enabled now experience. that's enhancements year-over-year have up XX improved by delivering end digital turning to mix. from grew our an the XX% by Global the This U.S. our led to reward

In openings addition, remain we meet year. third full Wendy's to opened the XXX during to for new our and quarter on of XX XXX restaurants goal the globally track

of with I'm team. the now on the to some Turning initiatives working

and months, I growth. you, and As the been optimistic on can near I in I'm for brand opportunities today our X of long-term for the you know, more now role even and most the have tell potential

across excellent by in that means made right ahead, continuing every food you build famous focused every the experience brand It we day. to we're love our time on down excellence, Wendy's doubling ensuring customer Wendy's look we customers every same are restaurant As new fresh, for on for every on restaurant. receive promise, for operational delivering every

put operate the every customer to Wendy's the own Our inspiring way the restaurant Wendy's to to best is promise by star, X make responsibility culture, the our brand. our employees and and foundational grow it's the delivered first, always

convention and met recent brand promise the with shared enthusiasm. have We has employees at been our with franchisees and

of digital embedded to elements: blueprint growth. framework relentlessly framework promise pursue long-term This consists share drive that these brand will is and profitable same-restaurant our net which consistent goals all unit drive The the I've growth established Wendy's with as development. Wendy's and serve Achieving experience. key accelerate strengthen and of will reach X the will growth, worldwide profitability, fans high-quality improve and restaurant a in sales more

we on with expand unit me are development. a Let bit the beginning global actions taking,

progress enhanced on in In countries, which we and new many franchisees renewal July sparking incentives development restaurant are with pipeline. are support to incentive expected rolled resonating programs are September, also our Latin Canada Our already out announced U.S. and conversations. development American new in and continued

average. new insights AUVs data-driven continue levels have trade we customer and restaurants technology the experiences. high-growth delivered target under Higher and by satisfaction above system These enhanced exceptional efficient using U.S. above open As an drive-through to to restaurants, areas. employee and experience, margins we more improve operating million delivery labor new and model a are $X

has Wendy's our our overall health. completed at of reimaging system we order improve and the conducted robust and further they In Wendy's have for incredibly been experience expectations globally, to healthy, and footprint deliver individual want profitability to and sales, is we restaurant Overall, restaurants of our so, the system brand review a fuel the restaurant to meet do ensure for customers. restaurants growth to XX%

trade margins of strategic are decision in operating and Following restaurants year this average. to and restaurants outdated $X.X These close well approximately that I below the have the review, million system have this areas. underperforming located made additional AUVs

and over improved designed units that profitability. have with time, initiative at by these ensure be We many of will replaced to significantly restaurants new locations this sales better

last an confidence than in new end years deliver years have XXXX, will the closures We and come. openings in have and prior the the unit compared the growth will we restaurant the leaving year, anticipate X growth of approximately flat quarter new By total to this by fourth opened offset our XXXX, will the more be net in year. closures restaurants we elevated over XXXX including XXX additional that to

place to previously commitments growth. last shared our build goal, we As our new XXXX unit supports have X% to X% outlook which for quarter, meet we stated development in net

fourth and beyond. drive quarter Now let's in our growth turn to plans the to

improvement in continue craveable year-over-year to third fourth do be to deliver commitment quarter. innovation impactful the everything our our expect the This We to growth from customer will relevant we to the putting first driven sales by menu, sequential in and value.

this earlier Wendy's are We have the that in deliver. executing can anniversary. momentum our month, Krabby X We we excited Under Burger to this fan on menu Pineapple iconic strong and SpongeBob's promotion to of launched favorite as celebrating this items, the core life Frosty, only and through we XXth Sea way innovation were bring a Patty

with that response media significant driving growth is resonating consumers, generating brand. This for sales Wendy's powerful a programming the is earned and

is expectations. our can We are that the very what we performance capabilities a innovation, has together. of example when great execution initial pleased and we bring deliver exceeded This marketing our

are campaigns momentum lineup strong of with in Looking on ahead, this upcoming a the we launching weeks. building

customer feature Media Bacon sandwich. our will and an We showcasing salted iconic caramel National of spicy new favorite innovative return chicken Mushroom Frosty the Cheeseburger a flavor,

Building on advertising we national our strategies. marketing efforts, are our and evolving digital

to pleased the progress. delicious the approach and gained as this incorporate highlight got our food campaigns new we be look Wendy's the has sharing with traction forward We're and to hero. tagline as more Our

the Extending see profitability. doing like is potential commitment our our one to with of we position on this. profit ways Coca-Cola accretive our strengthen significant partnership in I restaurant Moving are to beverages. on categories

grow enables us more this Our Coca-Cola than new profitable segment, platform, agreement XXX Freestyle choices. highly which the to leveraging drink offers

drink a as have we're also with promotion. options boost giving modern beverage with our We size beverage And we right plans business the add quarter off now, to aligned fourth consumer any preferences. $X kick

where which improvement the is outpace we we will category drive Another through rest sales breakfast continue will margin anticipate to day. of growth,

Media our by company recently the breakfast breakfast burritos launched As advertising, of growth. National investment part consistency for encouraged and breakfast of our our we in are

margins. our In addition, voice-enabled members on and another This crew AI with opportunity us taking customer technology spend labor allows the provides to time order efficiency activities that experience. enhance boosts Fresh elevate more to

results across that expansion we in the We margin franchisee will select and will restaurants, company and and restaurants at of company by the opportunities. are more unlock -- broaden testing implementation XXXX encouraged

pursuit gives and the to out our across growth beyond. and confidence for profitability us Our in accelerated these initiatives close outlook XXXX

the its for potential. I'm full ahead, vision future reach about our and to excited Wendy's Looking

X, deliver look which execution forward We XXXX. value execution in strategic grounded is focus more our on ability brand our held sharing our plans growth to Day, of the on about shareholder promise. profitable strategy on to our and our and create will be March Investor priorities Our growth details that build long-term at

to Finally, contributions. outstanding for I appreciation employees their dedication to suppliers and express all of my want and our

it turn more now results. third on to quarter details share GP our to I'll over

U.S. our X-year new this basis, the third and X.X%, quarter, contributions X.X% grew and growth our In segments global global across Kirk. systemwide restaurants same-restaurant by both sales supported a Thanks, International opened year. from sales on

restaurant fees. labor by accruals. efficiencies company XX.X%, was an The and compensation margin incentive and year. and The in was offset were in labor and was by flat prior increase rate inflation primarily These benefits G&A check increase offset impact driven Our declines. customer higher count in an by compensation in to a employee average U.S. of partially increase professional decrease

approximately EBITDA, offset increase the operating franchise and and revenue, adjusted to adjusted increase administrative and other in in from by Adjusted to company's increase by earnings rental These depreciation in were in EBITDA incremental shares million, increases an an program. higher per resulting tax primarily due outstanding partially and share net breakfast company's was fewer effective decreased investment expenses. $XXX in X.X% in were general royalty decrease share the income repurchase rate. by lower income. a driven partially offset These The the

company's offset flow the were capital cash Finally, decrease from investment cloud paid and decrease the the incremental partially cash in computing a increase These for by expenditures. in in advertising. free primarily in breakfast resulted arrangements

expectations turn to our for let's XXXX. Now

and share we quarter. As third to are have Kirk well in maintained are said, competing the pleased traffic

to this restaurants third category now and the global softer environment the of X%, X% given in year. growth approximately expect up made systemwide X% new year sales growth However, full contributions sales we opened of from same-restaurant quarter,

the strong fourth us XXXX the achieving our confidence compared October quarter updated U.S. with same-restaurant in We quarter, momentum giving sales start have significantly outlook. same-restaurant to accelerating sales to third

Our fourth administrative lower our restaurant related offset outlook unchanged. is to $XXX $XXX the fees the expense. for million franchise additional million and The adjusted EBITDA outlook general remains incremental being in of to system-wide and quarter closures updated of impact sales

year, restaurant adjusted our With the for $X.XX. X go company-operated EPS in XX% to quarter margin to we our to to XX% have expectation $X.XX narrowed to left outlook and U.S.

continue to and $XXX to million. Finally, of $XXX million to capital -- $XX flow we expenditures free We cash million of expect $XXX million

I'd Now allocation remains highlight which policy, like capital unchanged. to our

will model. asset-light profitable our true is growth, first Our to investing continue priority which still to we in while holding do,

per $X share announced share, we XXXX. mid-single-digit this reflecting fourth today, industry-leading declaration full our sustain and We dividend our the -- Secondly, in per an yield of to attractive $X.XX dividend of aligns a an of represents with dividend commitment year dividend. quarter

gives to million approximately Lastly, expiring reduce on us repurchase through we and due our to capital $XXX have cash in shares million $XXX policy and approximately shares February the of remaining excess repurchase our October have flexibility allocation repurchased XXXX. 'XX, debt. the million Year-to-date authorization X.X share

We continue $XX to million. of anticipate total repurchases in XXXX approximately share

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

company return an efficient As supports shareholders of sales flows, growth growth into repurchases. through share significant meaningful This drive is footprint. an global same-restaurant by and dividend supported to free we sales positive cash and translating cash expanding attractive system-wide which

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

Conference an we will York the will NDR XX. which, City. Barclays Nashville will participate XX, in On in the Conference be we X, Thank for Stephens Eat, hosted in by Investment in to November Sleep After we On Morgan November Chicago on December you, head New Play Stanley. and GP.

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

and details and earnings Investor we plan XXXX. a February to on call Day XX, conference host later. on fourth we hold And X report as quarter will with come to Lastly, our earlier, full more an mentioned March year

only. first limit yourself to to the high Q&A question. of transition X covering the of please question analysts, the now up queue Operator, to will please number Due call. part We the

[Operator Instructions].

today for question first David ISI. Evercore Palmer Our comes from of

you're skew you're time, it international development. the on thinking X to a I'll some unit of what's bright unit about wondering I you're try terms know to in prove you development at how how drag that? if but the had to temporary unrelated, I parter of that squeeze same that might growth really And a going closures your looks more in net growth now. thinking international U.S. about the about pretty going as in outlook. I'm thinking forward, an wonder

as about far innovations, marketing seem that platform-ish goes, type win. been -- as I'm that have things to Krabby more the how more clearly thinking a And are longer on renovations, I'm big types wondering we a these stuff Patty you're be but you're curve if mean, some great, I of wondering the bigger that around activations thinking to rebound of them. are should corner. also working has

I the David, appreciate question.

the build system. our makes First, and I'd strong And growth on about the that out to point to few unit overall like And want to asked. stronger. initiative things you talk strategy just is I This us initiative here already look, even an about question system. a

you build think $X the restaurants that XXX system, we the average have They And new to over locations don't restaurants their they're restaurants XX% is XXX this already this years. Wendy's margin business. last gone One, build our through in of built almost just And if have you restaurants of about image under about look the XXX X our our are When -- few the We'll of at looking year. underperform. strengthening we AUVs they're a closing under brands. million, at that system, activation.

those make truly system to our that stronger. are a the so we've And look at taken opportunities much

at think for you the when future, X% development to X%. we're guiding Now about

being Now This about our it beyond. thinking progress international, think just 'XX I'd you development XX% we're looking but we're about 'XX, our like the to in not goals. of kind and being at That's as strengthens as next domestic. that how years, several 'XX, 'XX, over XX% development

and So system. strengthening is our the development that strategy really

to focus some I And the seen of success the attribute what is mark. with We've and frozen leveraging off The is burger our me course, built Patty Krabby it's success menu. some turn the X really a game those changer. never burger Patty. menu. fresh, hit combination Frosty our that Krabby has Let built really core really things of up square, The of always our

ways. into core. do looking that our we As the in menu. continuing One, focus to we look our we're energize And -- we of how X future menu, our on build at core

We'll that, at But competition. that about We've menu. this advantage put we'll our incredibly our ingredients to that's up. quality we We the always We'll the innovation build important. of into that's think have continuously look continue never core an year. seen our I talk over frozen areas fresh an that think pipeline. to

bring Saucy to us going at you've innovation always our the be Nuggs, place year, forefront. look our If you've can this you where business a to That's seen innovate on us delight seen Frosty we consumers.

the we'll value. And to that then continue quality highest best through have the do delivers a last part, Bag. we the offering Biggie today And at value that

of better, our have things So and opportunity ongoing. always our as X far that's as we're even those this thinking We the kind focus. menu to get about

of Geiger next Our comes question Dennis from UBS.

innovation, the the cetera. initiatives et good some breakfast, wanted across like I the to back to come and see given to continuing offers, advertising, got daypart of seems place in at that it you're that you've performance

Just a how is anything are we more XXXX, plans touch that progress how curious, on plans Kirk, if against breakfast about progressing if you a perspective, from and and highlight bit to your could on how progressing perhaps kind there? think of

years thanks question. to breakfast and Dennis, important breakfast breakfast category build us We -- we've the invest than breakfast is like Yes. XXXX, in the We've growing now, tailwind still continue our for come. real faster is us it's opportunity invested potential it's it. in feel it is the We growing that business. but a set really the year part. for faster in and like this we right Wendy's. Appreciate to the to of launched an this than giving in out

us. to tailwind nice a it's So

opportunity incremental as accretive, this We also profit daypart an build leveraging restaurant. at It's the we look that. as

forward It's continuing us the it to need strategy be traction So come. look see do as to long initiative. years a can not just long-term we gives breakfast the that our going next year this the We over do to that us we something develop for or you haul. this to year, strategic

Gargiulo comes question Danilo of next Bernstein. Our from

Great. Thank you.

QX. macro You challenging more expecting was coming a than that you were into mentioned the bit

understand quarter? consumer, any whether be health domestically of well internationally. softening help seen as pressures So into macro the the So any intra-quarter can us And of the you've fourth might helpful. commentary as these you getting both

would about that of us would some I very up And the I would Look, some halves momentum a environment, challenging into second QX, XXXX. moving well. little against We're half little QX. saw me say, gives guidance. deliver still of brighter of That's then, will I a talk there's as And the Yes. the We a bit to seen shape that gives I in consumer course, that you QX. confidence. QX how in our bit That X in with tell kind of that we've confidence QX would it. kind it's X pick there's

in So still pressure, QX. under

The seeing first second the how with then half than better of kind architect of happening consumers. QX some would I in what's QX. felt a That's momentum half. little And we're

next comes Ivankoe of question from Our John JPMorgan.

companies. Food prime most XX%. is quarter, high which question ran don't I probably The actually costs. to on relative in very recent paper that you, mean, screen's most I restaurant the plus have public around to and labor, tell

In have in quick can X service higher doesn't is fact, that that's advertising. brand only think and not I than of

Wendy's XX to So type I a target? long opportunities thinking you, know of really types are "easy" Kirk, I to typically should term guess, peers. industry and it of we to the to that, kind tries be as get I ratio that the number improve and a of came where typical What are mean to of fix that that say for significantly you number. that closer more the system do have you of ways kind kind there And if relative the couple number benchmarked into "easy" of to

of see us definitely We've on have the X investing It's in to down. One focused et our Yes, things you working that like that drives buckets. margin. us orders drive-thru. with that is benchmarking do restaurant I why allows that. efficiently. saves this our employees see in really delivering the the are efficiency. some restaurant exercises gone number That AI course. labor in level time, cetera, important It That's that and through we driving

the -- is equal As almost and labor split you between know, food restaurants. in the

improve drive so the our to cost. And is and down labor food to opportunity cost

do us see you'll So that.

And I is aggressively drive you'll got business, beverages. new One to This which mix -- some standpoint. focus us beverage mix. allows think with the us We've last a of thing, on positive that categories see agreement grow Coca-Cola. is profit from accretive a our

from you'll accretion see menu profitability So standpoint. focus us a on

So the we're looking areas those X are at.

labor we're business at looking those the cost profitable and efficiency, growing we're faster. at of looking rest are Looking than that at the more food categories

question next Barclays. Jeffrey comes Our from Bernstein of

reiterated you that I Great. X think just to follow-up. just you The EBITDA guidance actually level high and was question had GP, adjusted the the talk to all of the despite the as offsets system EBITDA. to shortfall. what sales just maintain could X comp follow-up and if I you then maybe wondering

And closures. in, accelerating then franchisees my and question is confident U.S. of I X% unit reduced you on in to by of I side things. guys X% guess, more just that is XXXX, seem international net. following receptivity, up Presumably, base the it and on terms to a growth the Wondering guess,

'XX, whether I question how so tied because were those if closures you development share there goal absolute you're commitments, expecting how the know on. was is in or are wondering XXX% many or executed to of -- of mentioned not the many what I'm of number but So maybe openings newbuild you'd

be color any would So there great.

EBITDA So first, adjusted guidance. on the

offset for the sales obviously, franchisees franchise we side headwind the EBITDA on fees, that of to allowing -- are increased right, range was by created restaurant. tightening the we us as the close You're a

helping are EBITDA. a earning We our fee that is

million secondly, have slightly the is of G&A range lower And unchanged. we slightly million of $XXX $XXX overall guidance G&A to

the We of lower it. end little to are sliding a bit

keep were to we EBITDA that's adjusted So unchanged. able how

additional we A are little previously, rate. additional said right? about units. XXX As growth unit on the was closures X% net bit more closures, color The a

opening. basically, slightly up many That X% overall are overall for X% obviously units closing growth are really of really That's gives rate So ending why confidence unit accelerated as good in are as significantly XXXX. we to we us we flat. the

these answers said, all And and right, of have already, closures happened -- one think, would his 'XX, these in that didn't and Kirk as I in 'XX. come closures additional of out 'XX XXXX,

So it openings accelerated visibility net us on gives a to longer-term come.

Our comes Sandler. from next Brian of Mullan Piper question

you the Just spending on can think be back more Just the beverage the to innovated where component of time you about perhaps any an beverage the Do Is Kirk, you offering? component good platform? area where the be feel that talk here? would that you'll thoughts breakfast daypart. about great. could be from of offering

beverages still lot. the opportunity My for for with for breakfast. Thanks sure is Yes. is question. with Yes. an heart us a This

of think done delivers we've really an ingredients, menu with unbelievable a really building a kind I highest quality job for good customers. our the menu that

is Beverage opportunity. an

rest mentioned for As breakfast of the profitability. drives Yes, portfolio before, dayparts. it look beverage a us the innovate I and to for across

a see category. the from us lot beverage You'll in

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

to brands Patty performed any Kirk, really to if Can there what good plans and promotions appealed the Krabby you it's in customer are with it's to future? segments other collaborate well. the hear discuss

reached lot a Yes. is has that the folks. of X This

SpongeBob driven the a excitement a large And lot. population of XX-year of definitely it's You is has of anniversary the Wendy's cord table. think what about and struck kind the with bring best a clearly to that can

is regard. X that X away partnership, Paramount and I we great a got take think what X, I that's I this equals think plus in

think menu that of quality this we that of kind is a of delivered of also celebration have expectation the I against customers. the the

ways to find and our yes, traffic. think, continue us is excite opportunity an drive for to I this customers to

others our and always drive open-minded I We're growth, leveraging partner do excitement, want with where to example an is to traffic drive think to us will menu. this that.

be what to I we this of drive partners do example we growth. is and an think can can what good

Our of Lauren next Silberman Bank. question Deutsche from comes

the recent that acceleration trends, follow-up X seen. much. very you you've clearly, more, on just a the Thank

higher end, than would you launch to a trends level seen in comes recent As sustainably expect at we've to normalize quarters? what an the

the you seeing you're and just high-end cohorts? then about performance income low, And that middle can talk across the

Lauren. October, so versus we Yes, accelerated significantly third really remarks, said the the we in prepared as growth quarter.

guidance, on that, the quarter. are do the fourth math you in we implies As it stepping our our sequentially up obviously, performance

a the was year. start obviously great to that . So

as We said, additional mainstream lot dollar with national programming really rest there have, a Mushroom on to on we Bacon sandwich we're run consumers that Frosty, out and of continued and quarter impactful salted Cheeseburger Spicy the putting the Chicken the any our of caramel strength our promotion love, the the really for media against size has this quarter. clearly, through

So confident outlook. we our very performance. achieve versus a we step-up in think year-to-date the performance guidance, are And pragmatic very confident and in were the it's fourth with we to that quarter

in is income as $XX,XXX higher we $XX,XXX. income is research and as that are in we you share share are dollar Overall, share both households than We're know, overall and earn as lower more with maintaining those in cohort thing splitting category, income the dollar happens maintaining that far agency and the -- income and maintaining cohorts. cohorts. traffic As concerned, cohorts our same less the the than traffic those

Harbour question comes Stanley. Morgan next of Brian Our from

like could Sort drive-thru, quantify savings? AI that you're tell about more labor you, of accuracy sort of like so seeing a The you are that? seeing of on obviously be guess it, the do us that? I you for? one. like in Or you must you what kind what's expanded random tell rate could things hour voice of and or sort look you if usually about fact, us more You've seeing like. what and But

this. still what Yes. we're we see. developing like Look, We

which transactions drive-through, component XX% first Wendy's the in you is This efficiency right. the kind think of that's that transactions want get going of that. That through the can has through about in today through go you place drive-through, those the drive-thru. if to the correlation the you If that of and in we're a we to key about the efficiency think the driving direct which drive

the in restaurant. delighted I'd labor some improvements tell see gets continuously the better. we're overall you, We're gives we're to it efficiency, confidence the this with in how efficiencies going in and us accuracy, that model seeing

the improvement, employees by Right And to is learning, a more to execution. continuous leverage the we'll slow then and enabled see getting we're our where AI. restaurant is Look, So against this that in place you fast. the deliver accuracy system. across go the those efficient we things one -- and to us now, a like restaurants of this you'll go deployed

Our comes John Tower of from Citi. next question

competitors to how in performed specifically Maybe the of X your quarter, Bag third Biggie just period? platform I'm knowing the a your during curious, the that quarter, meal starting throughout did larger decided do value deal

value And competitors broadly similar early talking in about everyday speaking, relaunching then more likely a new XXXX. platform

to respond message? go how to competitors how might And brand So this you you speak -- the can performed around? has your plan in their value past when large kind frankly, revamped of

really yes, is a with On national It's consumers. very platform. Bag, Biggie recognized resonating well

their year-over-year deal or ours. competitor so. So The mix as our launched was up meal obviously X% supported we

maintain and for dollar . helped well So it and us quarter. did in and basis traffic share well us third on a the performed

value, and thinking seeking about that absolutely are price pointed right? in an environment is value consumers to about As value of and that. value promotions executing believe more only we bundles, We value not there's deals

believe innovate. we us, to continue to We competitive. For need be to

demonstrated this have quarter. in third We the

We're to on consumer. core environment. needs as said, to are value-seeking fourth letting go to innovation the Kirk quarter. in we the menu. delight menu it, of core do in The continue already lineup not the the the to Top value also see going delight this You

a forget We we are laser-focused the And have Again, then restaurant are executing accordingly and star operations, really don't to the in right? to fourth quarter. mindset. that be customer-centric

an hard experience We on the are having restaurants. at working that outstanding consumer having really value-seeking

whole by So value, package of great menu. this core great

meeting When in we consumer, we're We can think executing very then well it matters. we and we is how environment. are can successful be innovating the really when value are this the

Our next Stephens. question comes from Jim Salera of

components remarks, of this your you guidance. the lot driving XQ know maybe acceleration implied I've in offer during Saucy the I some Nuggs just accelerating advertisements October the around football that prepared In games and mentioned what of Can more obviously, seen a you in are acceleration? menu color season.

color contributing. how maybe So some on that's

any of quarter, half the that to the on back roll just Patty benefit then And off? of you start bridging thoughts assuming the kind Krabby see

to the is very We've I'd across quarter about In X, like our seen balance perform momentum menu. our well. large what sandwich the see

And Our momentum it's across Saucy that innovation Nuggs the has about, menu just that GP will us the talked well. balanced very with confidence our continue. platform, as gives value that done approach our

one look It's But that's kind growth. built that been a a a do the Patty of take menu. continue to of that. not the it, nice core it's combination of We'll of X: that's delivering you the terrific shot menu in at Krabby has off those is -- arm a if core areas.

And enough drives. can't iterate excitement you and innovation the again,

about. see continue You'll to innovation, drive talked as us we've

You'll caramel see for out a the season. salted Frosty come timely this

deliver those core best You'll innovation, things great a on and in see quality the marketplace. mean the kind focus Cheeseburger, continuous and are hamburger the delivering our us: us from Bacon I our again Mushroom value can of expect you

Sara Senatore of of Our next question America. Bank comes from

accelerating feels The markets any the the unit from and cities in the like and faster-growing closures, the that of that really targeting of away the Belt Sunbelt kind MSAs. kind are store lot are Northeast I a the themes of are they're around like geographically? restaurants and it I growth reason types or shying West ask to go just in is sense there of back to of,

think growth? And them, what like room this for there's in terms population I'm Is as out and we shifts. means just to this everybody follow we've just should figure And you really the if of in time economy also sort trying of net that further about grow beyond moves in population it the perspective? of to there is of seen room that densify U.S.? from over the or Or the to sort kind

Yes.

It's Let that. one. our spread line you of look punch me particular quite when the look just geography are out X And years X I are in the across and some it's that strengthening question, those -- out the the not at answer Sara. these you if for across Thanks old out. XX restaurants that's Look, really It's a not of particular. board. system, think entire It's brand think that's kind U.S., really you about the area, date. of on

system. many in things. look really It have potential. our U.S. of -- still scheme about would I that not we strengthening at us I look additional at runway have another hit potential, of couple our thousand It's is to in When though, kind of the that the our restaurants to allow

reach then And course, there's we to. that great internationally, of of to potential the aspire deal a penetration

about system, So was the to if get moving. strengthen high-performing think you strategy to restaurants our

they building deliver on of is poor focus restaurants. restaurants over the know because well these we average performing Our new

customers approach. we these poor the for that performing new restaurants want this about want restaurants best million $X then deliver. That's $X of So that in of taken we've kind And restaurants the experience mentality to customer and million do that the we're building AUVs. overall we

kind that's we strategy. this So of how have structured

from of Our Cowen. Andrew TD comes next question Charles

reconcile I wanted the with around the flat. overall mid-single comps to up breakfast performance digit

there . seeing you're sales breakfast of incrementality the what about talk you and years? in versus recent incrementality can So

highly daypart It leverages It's restaurant, leverages incremental it standpoint. Yes. a model labor the also restaurant itself. the the in from

we to that highly ahead category. our it's It's the growth the of you think incremental else do. And again, of see would growth. ahead anything we mid-single-digit So that's

It about momentum out think to you it. you -- we're daypart. with So on building gives this and stick the competition confidence gaining

at. It's part well. of important build that's continue this for an important strategy. We'll daypart, And to exactly our it's as franchisees where our we're

incremental our at incredibly to to the So the business. that's breakfast but how rest answer it kind daypart, of question, of we're is, looking your

Our next Francfort Guggenheim Securities of question comes from Gregory

Can cost to the a basis? expect And inflation seeing that how commodity had of just on side in out maybe labor you a kind I the play what up to the you're and GP. question you near . medium just from frame kind side of term?

Greg. couple A of things.

So told you we a commodity bit on flat. the I more front, inflationary. would be Last little time

We more inflation a have little on bit got beef.

about year. we see in commodity X% issued. So we restaurant for inflation the obviously the contemplated a margin That's guidance

tracking quarter last and stable. told way. to continued is rate that Labor X% X% We you

have visibility we the So, locked year. for full are down Price size now.

area. now commodities lock and our So focus We're in obviously for get other movements visibility to XXXX. expect I don't that any down turning for

Our next Bartlett Truist of Securities. Jake question from comes

question on my operational about was improvements. comments Kirk, your

of How into driver? the sales whether operations rank 'XX. largest in term as -- the I'm your how kind doubling opportunity longer you You down. that your X -- improving driving sales And an would wondering of in you as opportunity large talked that about potentials frame a is, as near

those operating something -- of marketing, owning first, with putting customer of every we think restaurant very we're best what right? close promise our to line behaviors our if question, about innovation, kind think our good digital growth, you And making those operational things and deliver way underpinned good Yes, to to doing it, that heart. want. you about all my X our When strategy by menu star, top our are our overall the and acceleration, the excellence,

that's kind how I think -- it. about of Those

operational delivers your important to it strategy, think us. that's is I that right? against excellence how what And is

our focused single deliver it. Wendy's we're experience the to why very time. We on customer are amazing want for every That's overt promise. that We about

essence on the of how of focus kind that's that. So we're putting

franchisees. ourselves that. our our our organized convention this to recently had with excellence. do operational We energy We focused We've on

this what and companies of all deliver They excellence talking that's think essence kind of for do. great we're the I their about. what experience with operate great customers. And a is

comes Peter Saleh of next BTIG. Our from question

are about strategy. ask to the any $X that's soft been you wanted proven size promotion a guys I drink that running, Yes.

it's I think this your competitors many run we've seen of worked. definitely past, the in and

is will a early success Or just to seeing carry fourth there? the could quarter? XXXX? talk limited And you're this you this So that that's the promotion about into

Yes. you. the focus, is main Beverage I mentioned Yes. Thank like before.

We terrific have with this partnership Coca-Cola.

Coca-Cola customers ability it like both X we different that It real love. What it freestyle have sugar, the I beverages. is delivers and XXX the deliver the giving portfolio at about to That's full and has in it has delivers advantage sugar We over which definitely an it machine, choice. Wendy's.

celebrate quarter won't of kind That's moving is wanted and intention the we about that's remind the that when people 'XX forward. $X see promotion that But effective. of X. we talk that. definitely in And We to about one, celebrating.

is We future. in have for a us opportunity real Beverage beverage. the profit

choice in a to down Freestyle that We that. us settle have customers, allows and see us on deliver for you'll platform

now. So we've right on momentum beverages got some

that expect will We continue.

Goldman Cho from comes question Next Sachs. Christine of

March. kind now But an feel of do people you major your in them looking accountability organization we the you And are of So accelerate of key to forward Kirk, announcements in Chief changes perspective? to in on VP and have drive Day U.S. meeting hires, leadership some globally? including of all growth Senior Liquor Analyst the Officer some priorities your in Operations what executive [indiscernible] in place saw and right and some

Yes. we've for here we Thanks some made the question. changes about are Yes, at that very Wendy's. excited

ourselves our a and we our talent to I I that, of say development standpoint, want focus, business focused. and high when I and execution And think away drive business development that international that structured from a have level you to is we take our to operations. one, accelerate international U.S. structured we

So are that supporting And with that engaged I in. organization very I a is, that organizing growth deliberate we've for we very will think, confident great talent future ourselves am strategy and us. that drive

of from comes Our next Jefferies. Alex question Slagle

open. now is line Your

specific elaborate and just whether you front differently a the on to going jump spun I on seems promotions you're see if social collaboration to you're changes recent in you wanted there's back Just innovation. can seeing any drive big could the like really to what are carry and doing something future that what on or or success with digital working engagement, and weeks. that

when of It's been a been a a So great social working at working, this great right? time, example wanting game to the lot another on have same are The networks our impactful. build collaboration. menu. has is very This of off Yes. things

been our both through program growing and business elevated. delivery digital loyalty has Our

of So lot it's ticking of kind a boxes.

deliver it with execution best customers interested great that's all in in, the our It's the really against are fans together come and digital You menu coupled media. exciting one. great you this with great got on something advertising, that business, and platform our the and social then

from comes Northcoast Research. question next Our Jim of Sanderson

up to of that or success would you've that the you you're on quarter? partnerships discussion the Krabby launching plan promote later product innovation potentially celebrity the endorsements, Patty this of actually following the more described something Do promotion. promotional Just support, given add

nature. more Yes. Look, gives us this to definitely of things the do the success encouragement

be shows also it partner think that can a Wendy's this I in great regard.

partnerships -- case, are parties I is both that's is true. that And important partnership win. think think I the -- that in that this both in

opportunities how Wendy's. about the it build every menu in we is We think the course, that brand and Of at at only to these we'll look to bright the sense opportunity new the opportunities, think of make comes best certainly that and to for those when is that what elevate this kind that's places, for we look us future. future

Our from today RBC. comes of question for final Logan Reich

the brackets middle cohorts? about to cohorts. relative the through the just divergence improving as sort follow-up between and October ask Or October? the wanted lower as well of Are Just income through quarter cohort is into within improvement those you any a quarter and income guys the to income and trends higher seeing in there

quarter X is The one sounding said cop-out I we as really share cohorts. income I your data numbers, a October answers of available, a Yes, view in . answer. my answer so not the and from in of point higher maintain can't market previously share lower with question.

and morning. this great forward Have you, you, us a our the to for of was look quarter again with fourth question speaking on GP, thank and February. call. last That you our joining Kirk day. Thank call everyone, We in

you. Thank

all call. Thank you joining for today's

You disconnect may now your lines.