Wendy’s said comp sales in its North America region increased 3.1 percent during the third quarter, leading the chain to raise its sales guidance for the full fiscal year.
The strong initial performance of Wendy’s new 4-for-$4 promotion also contributed to the improved outlook, CEO Emil Brolick said in a statement.
Total revenues fell 6.5 percent from the year-ago quarter, to $464.6 million, largely due to the sale of a number of company-owned locations earlier this year. Franchise revenues increased 2.3 percent as the result of higher royalties, rents and other fees.
"Our strong third-quarter results demonstrate the positive impact of our transition to a predominantly franchised model, with royalties and rental income contributing a higher amount of earnings," said Brolick, who is set to retire from the company in May 2016.
Wendy’s reiterated plans to reduce company-owned restaurants to 5 percent of its system, saying it intends to sell around 225 restaurants by year’s end and 315 more in 2016.
"We believe our system optimization initiative will drive future growth by providing opportunities for expanded restaurant ownership to strong operators who have demonstrated a commitment to Image Activation and opening new restaurants," CFO Todd Penegor said. "Interest in the domestic restaurants that we intend to sell is high from existing and prospective franchisees, and we are confident that we will strengthen the Wendy's brand as a result of these transactions by improving the efficiency and effectiveness of our total system.”
Wendy’s said it plans to “reimage” 22 percent of its North America units by year’s end, moving toward the goal of at least 60 percent by the end of 2020.
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