Wendy's touts progress on food; announces overseas expansion
Executives from Atlanta-based Wendy's/Arby's Group offered analysts burgers for lunch on Thursday in New York. They are hoping both the food and the finances impress Wall Street this year.
In a series of presentations at the Lighthouse at Chelsea Piers, executives tried to manage expectations as they enter a "transition year" with the hoped-for sale of the Arby's brand. But they also touted progress -- sharper marketing, a freshened menu, chances for growth in the U.S. and overseas, and $94 million dedicated to building, remodeling or maintaining Wendy's restaurants.
Executives said revamped products -- including salads, fries and items on the relaunched value menu -- are getting early traction at Wendy's. A new breakfast menu, including artisan egg sandwiches, multi-grain tortillas and sourdough paninis, is improving sales in test markets.
Wendy's is the only major fast food hamburger chain not serving breakfast. Executives say adding breakfast could increase an average Wendy's restaurant's sales by $140,000 to $150,000 per year. Analysts say reaching that goal may take a while.
About 1,000 Wendy's restaurants, or about 15 percent of the total, could be serving breakfast by the end of 2011.
"We left the Wendy's analyst day encouraged," wrote analyst Sara Senatore. But she added that Wendy's faces entrenched competitors in the U.S. and abroad as it tries to add more units.
The company is exploring expansion opportunities in Japan, China and Brazil. In Argentina, Wendy's plans to open 50 Wendy's restaurants over the next 10 years, with the first opening this year in Buenos Aires.
"Argentina is the latest example of the meaningful progress that we are making in the acceleration of our international expansion efforts," said chief executive Roland Smith.
But the decision to sell Arby's now presents "something of a cautionary tale," Senatore said. Executives have spent about two years arguing the merits of the 2008 combination of Wendy's and Arby's, including cost-savings, multi-brand opportunities and the chance to turn Arby's around.
