Wendy's Benefits From Robust Comps Growth Amid High Costs

Core Viewpoint - Wendy's Company is experiencing growth driven by strong same-restaurant sales, particularly in U.S. breakfast and digital sales, while facing challenges from high commodity and labor costs [1] Growth Drivers of WEN - The company reported a 4.9% year-over-year increase in same-restaurant sales at international locations (excluding Argentina) during Q4 of fiscal 2024, compared to 4.3% the previous year [2] - Global same-restaurant sales increased by 4.3% year-over-year, up from 1.3% in the prior-year quarter, with U.S. sales growing 4.1% compared to 0.9% a year ago [2] - Innovative offerings and value propositions are expected to enhance customer satisfaction and sustain margins throughout 2025 [3] - Breakfast sales grew over 6% year-over-year in 2024, outperforming the QSR burger category, driven by brand awareness and product innovation [4] - The company plans to maintain breakfast momentum through product innovation, strategic partnerships, and targeted promotions in 2025 [5] Expansion and Unit Growth - Wendy's opened 276 new restaurants globally in fiscal 2024 while closing underperforming units, expecting new locations to deliver double the average unit volumes (AUVs) of closed restaurants [6] - The company anticipates net unit growth of 2% to 3% in 2025, with plans to open 150 to 200 new units, primarily in international markets [7] Factors Hurting WEN - General and administrative expenses rose 2.3% year-over-year to $67.2 million in Q4 of fiscal 2024, driven by increased incentive compensation and employee benefits [8] - Inflationary pressures on commodities and labor are impacting costs, with projected commodity inflation of about 1$1.9 billion in 2025 [9]