Wendy’s(US:WEN)2021-03-03 17:05Financial Data and Key Metrics Changes - Adjusted revenues increased by approximately 12% to $382 million, driven by higher sales at company-operated restaurants and an increase in franchise royalty revenue [14] - Adjusted EBITDA increased by almost 40% to $115 million, primarily due to higher franchise royalty revenues and fees [15] - Free cash flow came in at approximately $182 million, with a year-over-year decrease attributed to higher reorganization payments and timing of rental payments [16] Business Line Data and Key Metrics Changes - Breakfast contributed approximately 6.5% to U.S. same-restaurant sales, with the breakfast daypart expected to grow by 30% in 2021 [13][22] - Digital business grew to over 6% of U.S. sales, more than double the prior year, with significant increases in monthly active users [24] - Company restaurant margin increased by 330 basis points to almost 18%, driven by higher average checks and lower insurance costs [14] Market Data and Key Metrics Changes - U.S. same-restaurant sales were up approximately 6% on a one-year basis and almost 10% on a two-year basis [11] - Global same-restaurant sales grew 1.2%, with significant improvement in the back half of the year [15] - International markets finished with positive same-restaurant sales, with digital business doubling to approximately 10% [30] Company Strategy and Development Direction - The company aims to significantly build its breakfast daypart, drive digital business, and expand its global footprint [10][18] - Plans include opening about 250 new restaurants globally in 2021, an increase of 65% from the previous year [28] - The company is focused on operational excellence and enhancing customer experience through digital initiatives [19][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for growth, citing strong franchise support and a healthy franchise system [12][20] - The company expects a significant increase in global system-wide sales of 6% to 8% in 2021, driven by same-restaurant sales growth and new restaurant openings [34] - Management highlighted the importance of consumer mobility returning to pre-pandemic levels to drive growth in the breakfast segment [70] Other Important Information - The company plans to release its annual CSR report in April, announcing new goals and progress against industry standards [20] - The leverage ratio improved to 5.2 times, with expectations for continued reduction as debt is paid down [41] - The company declared a 29% increase in its quarterly cash dividend to $0.09 per share, reflecting strong liquidity and business momentum [40] Q&A Session Summary Question: Restaurant unit growth expectations - The company expects 2% net unit growth in 2021, with 1% in the U.S. and over 10% internationally, ramping up to 3% in 2022 [45] Question: Impact of breakfast on overall sales - Management confirmed that breakfast has added to overall sales without cannibalizing other dayparts, with a positive impact on frequency [52] Question: G&A investment and efficiency - The company aims to maintain G&A at 1.5% of sales in the long term, with current investments focused on technology and operational efficiency [61] Question: Marketing strategy amid competition - Management is confident in maintaining market share despite increased competition, with plans to drive awareness and trial for breakfast [78]