This story was originally published on Restaurant Dive. To receive daily news and insights, subscribe to our free daily Restaurant Dive newsletter. Dive Brief: Trian Fund Management and its founder Nelson Peltz, owner of over 16% of Wendy’s stock, said the fast food chain is “currently undervalued,” in a Wednesday filing with the Securities and Exchange Commission. Peltz is considering either purchasing additional stocks that would allow him and Trian Management to control the company, or disposing of s ...

Group 1: Company Strategy and Performance - Wendy's plans to close 5% to 6% of its 5,959 U.S. restaurants, equating to approximately 298 to 358 locations, in the first half of the year as part of its turnaround strategy called Project Fresh [4] - The company reported a decline of 11.3% in same-store sales in the U.S. for the October to December quarter [1] - Interim CEO Ken Cook emphasized the need to shift focus towards value to attract customers who are feeling the strain of higher living costs [4][8] Group 2: Competitive Landscape - Competitors like McDonald's have successfully increased U.S. sales by 6.8% in the fourth quarter by focusing on value and affordability [8] - Wendy's has introduced a new permanent value menu called "Biggie Deals," featuring customization options at three price points: $4, $6, and $8 [8] - The company aims to restore relevance and rebuild trust with customers through disciplined execution and marketing in 2026, which is designated as a "rebuilding year" [9]

Core Insights - Fast-food prices have significantly increased, with some combo meals now comparable to casual dining prices, reflecting a broader trend in rising food costs [2][5][6] - Chick-fil-A has maintained its popularity and customer satisfaction despite raising prices, achieving over $9 billion in revenue in 2024, a nearly 14% increase from the previous year [8][4] - The chain's expansion plans include international growth, with new locations opened in England and Singapore, indicating a strategic move beyond North America [12][13] Price Trends - Fast-food menu prices have risen between 39% and 100% from 2014 to 2024, surpassing the national inflation rate of 33% during the same period [5] - Chick-fil-A's prices have increased by over 55% in the past decade, while McDonald's prices have surged by 100% since 2014 [6][7] Customer Behavior - Rising grocery and restaurant costs have led to consumers making difficult financial choices, with 27% of respondents in a Credit Karma survey reporting they have skipped meals to save money [3] Company Performance - Chick-fil-A generated $22.7 billion in system-wide sales in 2024, showing consistent year-over-year growth [8][16] - The chain has been recognized as the top quick-service restaurant for the 11th consecutive year, maintaining a customer satisfaction score of 83 [4] Expansion Strategy - Chick-fil-A operates 3,109 locations, with a mix of company-owned, franchised, and licensed restaurants, and is now expanding internationally after decades of focusing solely on North America [13][14]

Core Insights - KFC is adapting to changing consumer preferences by introducing new menu items and marketing strategies to stay competitive in the fast-food industry [1][2][5] Group 1: Sales Performance - KFC's US sales increased by 2% in Q3 of fiscal year 2025, driven by the popularity of spicy wings and potato wedges [2] - The new restaurant concept, Saucy, has been successful, generating approximately $2.6 million in annual sales, which is about twice the sales of a typical KFC store [3] Group 2: Marketing and Innovation - KFC is launching a pop-up restaurant called "Sundays" in New York City, featuring larger versions of its classic chicken sandwich, as a competitive move against Chick-fil-A [4] - The company is also initiating a "Size Matters Tour" to promote its new larger chicken sandwich by offering free samples in over a dozen cities [4] Group 3: Competitive Landscape - The fast-food sector is facing increased competition, with brands striving to attract customers amid rising menu prices [5][6] - KFC's renewed focus on innovation and relevance is yielding positive results, with improved traffic trends in the US and stronger international demand [9] Group 4: Strategic Focus - KFC's strategy emphasizes growth through brand relevance, marketing innovation, operational excellence, franchise partnerships, technology, and scale [12]

Financial Data and Key Metrics Changes - For Q1 fiscal year 2026, total revenues reached $1.35 billion, an increase of 18.5% year-over-year, with consolidated comp sales up 18.8% [16] - Adjusted diluted EPS for the quarter was $1.93, up from $0.95 last year [16] - Restaurant operating margin improved to 16.2%, a 270 basis points increase year-over-year, primarily driven by sales leverage [17] - Adjusted EBITDA for the first quarter was approximately $172.4 million, a 54.4% increase from the prior year [19] Business Line Data and Key Metrics Changes - Chili's reported same-store sales growth of 21.4%, driven by a 13.1% increase in traffic, a 4.3% positive mix, and a 4% price increase [16] - Maggiano's experienced a decline in comp sales of -6.4% for the quarter [17] Market Data and Key Metrics Changes - Chili's outperformed the casual dining industry by 1,650 basis points in same-store sales growth [5] - The customer base for Chili's is growing across all income levels, with the fastest growth seen in households earning under $60,000 [9] Company Strategy and Development Direction - The company is focusing on stabilizing and improving Maggiano's through the "Back to Maggiano's" strategy, which emphasizes classic recipes, improved service, and guest-facing repairs [12][14] - Chili's is ramping up its reimage program and expects to complete four remodel pilot restaurants by the end of the quarter [20] - The company aims to return to positive net new unit growth for Chili's and stabilize Maggiano's performance [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain strong sales growth despite economic uncertainties and anticipated higher commodity inflation [22] - The first quarter is expected to be the strongest year-over-year, with more moderate gains anticipated in subsequent quarters [23] - Management remains focused on long-term growth and strategic investments, despite challenges in the macroeconomic environment [24] Other Important Information - The company repurchased $92 million of common stock under its share repurchase program [20] - The adjusted tax rate for the quarter increased to 18.5%, driven by higher sales [19] Q&A Session Summary Question: How does Chili's plan to leverage tokenized consumer data to enhance engagement? - Management plans to track monthly cohorts of new guests to understand their repeat visitation and the impact of menu initiatives on guest frequency [26][28] Question: How is the value platform performing against expectations? - The value platform is performing well, with significant lifts observed from recent advertising campaigns, particularly the $10.99 burger deal [30][31] Question: What insights can be shared regarding younger consumers? - Younger consumers are returning as frequently as other guests, and marketing efforts are focused on maintaining relevance with this demographic [39][40] Question: What is the status of the food renovation journey? - The company is progressing with food renovations, including a chicken sandwich platform and plans to bring back the old skillet queso due to customer demand [42][43] Question: How is the North of Six initiative progressing? - The initiative is yielding positive results, with improvements in scheduling and operational efficiency being implemented across the system [71][74] Question: What are the expectations for Maggiano's turnaround compared to Chili's? - The turnaround for Maggiano's is expected to be slower due to its smaller size and less national marketing presence, but management is optimistic about stabilizing and growing the brand [80][83]

Financial Data and Key Metrics Changes - The company reported a strong start to the year with positive traffic growth observed in July, attributed to improved operations and marketing efforts [4][5] - The company is confident in achieving low single-digit comparable sales growth for the year, with pricing expected to contribute approximately 2% [39] Business Line Data and Key Metrics Changes - The culinary roadmap introduced by the CEO has led to structured menu innovations, including the successful launch of the summer barbecue menu and the Dubai Shake, which have positively impacted traffic and check growth [6][7][16][20] - The company has seen high single-digit comparable sales in markets outside of New York and D.C., indicating strong performance in cities like Denver, Los Angeles, and Miami [12][14] Market Data and Key Metrics Changes - Urban markets like New York and D.C. have faced unique pressures, particularly from decreased international tourism, while other markets have shown significant momentum [14][15] - The company has a robust pipeline, with over 90% of future openings planned outside of New York and D.C., reflecting a strategic focus on diversifying market presence [14] Company Strategy and Development Direction - The company is focused on driving same-store sales growth, expanding unit count, and improving profitability through strategic investments in operations and marketing [16][41] - The introduction of a loyalty program and enhanced app features aims to increase customer frequency and engagement [31][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming current macroeconomic pressures and highlighted the importance of operational improvements to maintain guest experience and profitability [55][56] - The company is optimistic about future growth, particularly in new markets and through innovative menu offerings, while also addressing supply chain efficiencies [71][72] Other Important Information - The company has implemented a new labor model to optimize staffing and improve operational efficiency, resulting in record labor attainment [59][60] - A new kitchen testing facility has been established to enhance equipment optimization and kitchen layouts, which are expected to improve margins and reduce build costs [65][68] Q&A Session Summary Question: What drove the acceleration in July? - The acceleration was driven by improved operations, a structured culinary roadmap, and successful menu innovations like the summer barbecue and Dubai Shake [4][6][7] Question: How have urban markets performed? - Urban markets like New York and D.C. have faced challenges, but there has been significant growth in other markets, with high single-digit comps reported [12][14] Question: What are the company's growth expectations for unit openings? - The company expects to continue expanding unit openings, with a strong pipeline and strategic investments in site development [41][42] Question: How is the company addressing cost pressures? - The company is focusing on operational improvements and supply chain efficiencies to offset cost pressures without significantly increasing prices [53][71] Question: What role does the new loyalty program play? - The loyalty program is designed to enhance customer engagement and frequency, leveraging app features to incentivize repeat visits [31][34]

Industry Trend - Fast-food industry uses chicken (battered, breaded, and served as a sandwich, tender or nugget) as a weapon of choice [1] - Industry heavyweights are lining up against fast-growing upstarts [1] - Billions of dollars in sales are on the line [1]

Core Insights - Wingstop is launching "Wingstop Drop," a series designed to create excitement and anticipation among fans through exclusive offers, flavors, merchandise collaborations, and limited-time releases [1][2][3] Promotions and Offers - The inaugural Wingstop Drop features a Buy-One-Get-One free chicken sandwich promotion available until August 17, encouraging customers to try all 12 flavors of the Wingstop chicken sandwich [3][4][5] - Customers can redeem the BOGO offer using the promo code BOGOSAMMY on Wingstop's website or app for a limited time [6] Marketing Strategy - The initiative aims to integrate "drop culture" into Wingstop's flavor offerings, targeting trendsetters and flavor enthusiasts as the football season approaches [6] - Wingstop plans to continue weekly drops leading up to the start of the football season, promising bold and exciting promotions [5][6] Company Overview - Wingstop, founded in 1994 and headquartered in Dallas, TX, operates over 2,800 restaurants globally, with 98% owned by brand partners [8] - The company reported approximately $5 billion in system-wide sales for fiscal 2024 and has achieved 21 consecutive years of same-store sales growth [8] - Wingstop aims to become a Top 10 Global Restaurant Brand and has been named the Official Chicken Partner of the NBA [8]

Group 1 - Fatburger is celebrating National French Fry Day with a week-long promotion offering free Fat or Skinny Fries with any online burger or sandwich purchase from July 9 to July 13 [1][2] - The promotion emphasizes the importance of fries as a staple side dish, highlighting their quality and pairing options with various burgers and milkshakes [2] - FAT Brands, the parent company of Fatburger, operates 18 restaurant brands and has over 2,300 units worldwide, indicating a strong market presence [4] Group 2 - Fatburger has a legacy of over 70 years, known for its custom-built burgers and a loyal customer base that includes celebrities and athletes [5] - The restaurant chain focuses on providing a contemporary dining experience while maintaining high standards of quality and taste [5]

Company Growth & Performance - Raising Cane's jumped from 33rd to 18th in restaurant rankings between 2021 and 2024, surpassing KFC, and is larger than Wingstop [1] - The company's U S sales have grown to nearly $5 billion [8] - Raising Cane's Times Square location generated $25 million in sales last year [4] - The chain has experienced nearly a fourfold increase in store count over the past decade [5] - In 2024, Raising Cane's reported an almost 11% increase in foot traffic at existing locations [7] - The chain has posted 64 consecutive quarters of same-store sales growth [14] Business Strategy - Raising Cane's focuses on a simple menu: chicken, fries, Texas toast, and coleslaw [2] - The company does not engage in value plays or limited-time offers, maintaining consistency for customers [2] - Raising Cane's strategically selects locations, sometimes waiting for the ideal spot [6] - The company self-funds its expansion and maintains company-owned restaurants, with only 3% franchised [15] - Raising Cane's has no interest in going public or taking private investments [12][13] Market & Industry Dynamics - The chicken category has been driving growth in the quick-service and fast-casual sectors [18] - McDonald's reported $25 billion in annual systemwide sales from chicken, matching its beef sales [19] - Quick-service chicken is a competitive market with many fast-food chains vying for market share [21] Future Ambitions - Raising Cane's aims to become a top 10 U S restaurant brand with $10 billion in systemwide sales and average sales of $8 million per restaurant, projected around 2029-2030 [23]