Wendy’s plans to accelerate the closure of some units

Wendy’s Co. will close additional restaurants, accelerating planned closures from 2025 to this year, executives said Thursday.

The Dublin, Ohio-based diner chain, which posted earnings for the third quarter ended Sept. 29, said it “made the strategic decision to close additional restaurants this year that are outdated and located in underperforming retail areas. $1.1 million and operating income well below the system average.”

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The company aims to replace them with restaurants with average sales of $2 million or more.

Kirk Tanner, CEO and President of Wendy’s, said, “We designed this initiative to ensure that many of these locations are replaced by new restaurants in prime locations with significantly improved sales and profitability.”

Tanner added that executives expect total closures in 2024, including additional closures in the fourth quarter, to be offset by new restaurant openings this year, “leaving our net restaurant growth approximately flat compared to the prior year.”

Gunter Plosch, Wendy’s chief financial officer, said that “in total, approximately 140 additional locations were closed.”

Executives told analysts that the planned closures were scattered geographically.

“When you think about strengthening our system _— you’re looking at a brand that’s 55 years old, and some of these restaurants are just outdated,” Tanner said.

Wendy’s is looking to partner with Coca-Cola Freestyle to promote the $1 drink, Tanner said.

“It definitely represents the portfolio that Coca-Cola has and delivers it in both full sugar and zero sugar, giving customers real choice,” Tanner said. “That’s what Wendy’s does, and we wanted to celebrate that and remind people of that with the $1 promotion.”

Wendy’s plans to follow mets SpongeBob SquarePants Promotion in the third quarter with a Salted Caramel Frosty and a premium mushroom burger in the fourth quarter, Tanner said.

For the third quarter ended Sept. 29, Wendy’s net income was $50.2 million, or 25 cents per share, compared with $58 million, or 28 cents per share, in the prior year. Revenue was $566.7 million, up from $550.6 million a year ago.

Wendy’s third-quarter same-store sales growth was 2.8% worldwide, with growth of 2.2% in the U.S. and 7.8% internationally.

As of September 29, Wendy’s had 6,010 restaurants in the U.S. and 1,156 internationally, for a total of 7,166 restaurants.

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