DUBLIN, OHIO — Executives of Wendy’s, Inc. expect more late-night orders and more digital orders overall to drive growth.
“After diligent preparations to ensure our customers will have a great experience, we plan to promote Wendy’s late-night business this summer,” Todd A. Penegor, president and chief executive officer, said in a May 10 earnings call to discuss results for the first quarter ended April 2. “During the first quarter, we already saw an uptick in sales at this daypart, driven by a return to more normalized late-night hours, local advertising and our growing late-night delivery business.”
National advertisements will promote Wendy’s late-night business, meaning midnight or later. Late-night traffic in general has returned to pre-pandemic levels, Mr. Penegor said.
“Our opportunity is to make sure that we're getting our fair share of that late-night daypart,” he said. “We'll continue to lean in to take a look at what that menu construct should look like to be really efficient and effective to drive throughput and great food at that late-night day part.”
Now that Wendy’s staffing level has improved, the restaurant chain has the labor to prioritize the late-night business, he added.
Breakfast remains a focus at Wendy’s, too.
“We also have plans in place to accelerate our momentum at the bookends of the day, breakfast and late night,” Mr. Penegor said. “We have plans for increased activity to drive the breakfast business in the US and Canada for the remainder of the year and will lean into our playbook of building awareness around our craveable products, launching exciting menu innovation and promoting targeted trial-driving offers.”
When compared to the previous year’s first quarter, same-store restaurant sales at Wendy’s grew 8%, including 7% in the United States and 14% internationally. Net income of $39.8 million, or 19¢ per share on the common stock, was up 6% from $106.9 million, or 17¢ per share, in the previous year’s first quarter. Net revenues rose 8% to $528.8 million from $488.6 million.
Digital sales increased year-over-year by over 25%, Mr. Penegor said.
“On the International side, our customers are increasingly embracing our many digital options leading to an all-time high digital sales mix of nearly 19%,” he said. “In the US, our digital business accelerated every month throughout the quarter as we achieved our highest ever US digital sales mix of over 11%. This growth was driven by continued gains in delivery and mobile order sales as we offered compelling value alongside our third-party delivery partners and once again successfully advertised our digital options across the March Madness (college basketball) tournament.”
Wendy’s has partnered with Google for a Wendy’s Fresh AI, a voice artificial intelligence (AI) system for drive-thru ordering.
“We believe this solution creates a huge opportunity for us to deliver a truly differentiated, faster and frictionless experience for our customers and allows our crew members to continue focusing on making great food and providing exceptional service,” Mr. Penegor said. “We plan to launch this pilot in June and are incredibly excited about the potential unlocks to speed of service, customer satisfaction and profitability that this technology could drive over time.“You can expect us to continue pushing into new and promising technology alongside our partners as we look to maximize the restaurant economic model and grow our digital sales to approximately $1.5 billion this year.”