DUBLIN, OHIO — The Wendy’s Co. announced changes to its leadership structure to drive efficiencies across the organization following a strong first-quarter performance.
Kurt Kane has been promoted to the newly created role of president, U.S. and chief commercial officer. Abigail Pringle has been named to the new position of president, International and chief development officer.
Mr. Kane joined the company in 2015, serving primarily as chief concept and marketing officer, and added executive vice-president to his title last year. He will assume responsibility for the U.S. business, including operations, marketing and research and development, in addition to continuing to lead digital transformation efforts.
Since joining Wendy’s in 2002, Ms. Pringle has held various leadership roles and last year was named chief global development officer and International. She will continue to lead the international business, which will now include Canada, and will continue to oversee global development.
As a result of the changes, Bob Wright, executive vice-president and chief operations officer, will depart the company following a transition period through the end of May.
“As we continue to grow, we see an opportunity to increase our effectiveness by driving clear accountabilities for our growth across the organization,” said Todd A. Penegor, president and chief executive officer of Wendy’s, during a May 8 earnings call.
Net income for the first quarter ended March 31 was $31,894,000, equal to 14c per share on the common stock, which was up 58% from $20,159,000, or 8c, in the prior-year period. Results reflected higher operating profit in the current quarter and a loss recorded in the prior-year quarter on early extinguishment of debt.
Revenues totaled $408,583,000, up 7% from $380,564,000, driven by higher sales at company-operated restaurants and an increase in franchise royalty revenue and fees.
“We continue to demonstrate that we are an efficient-growth company, showcasing solid system-wide sales growth of 3.3% on the backdrop of improving same-restaurant sales and global restaurant expansion, which is translating into significant free cash flow generation,” Mr. Penegor said. “We opened 43 restaurants globally, which is an acceleration over the 33 that we've built in the first quarter of last year. We grew our company restaurant margin by 110 basis points as our ‘one more visit, one more dollar’ strategy drove a positive sales mix in the quarter.
“We are off to a strong start in 2019 as we achieved 12% adjusted EBITDA growth, 27% adjusted e.p.s. growth and a 17% increase in our free cash flow, which gives us confidence in our outlook for the year.”
During the quarter, Wendy’s offered delivery at approximately 75% of its restaurants in North America and remains on track to have 80% of the system covered by the end of the year, Mr. Penegor said.
“Our biggest competitor is food at home, and convenience continues to get redefined,” he said. “So we'll continue to look at this as an opportunity for growing our business into the future. And we're in the early innings.”
He added the fast-food hamburger market is facing pressure from competition in chicken and Mexican categories.
“… Q.S.R. is the place to be, and share of all restaurant meals continues to grow in Q.S.R., but we’ve got to continue to make sure that we look at all the new competitors, right?” Mr. Penegor said. “We've said that in the past, and what we need to do is just continue to deliver on great-tasting food in a great-looking restaurant with a greater service experience and play to our strengths around quality and fresh and customization, really leveraging the digital platforms going forward to continue to bring more customers into our restaurant more often, so we feel like we're well positioned to compete.”