Wendy's Focuses on Strategic Relocation for Sustainable Growth

The American fast-food giant Wendy's has announced plans to close around 140 of its less profitable locations by the end of 2024, while simultaneously opening a comparable number of new restaurants in more attractive locations. This measure aims to accelerate the gradual growth of 3% to 4% for the next year and beyond, as explained by CFO Gunther Plosch during a recent conference call with investors. Plosch emphasized that the closures and new openings will keep the total number of locations roughly stable. Wendy's plans to have opened more than 500 new restaurants over the past 24 months by the end of the year. This strategy is intended to enable stronger growth for 2025 and the following years. CEO Kirk Tanner added that many of the restaurants to be closed are outdated and situated in less profitable commercial areas. On average, these locations generate sales of about 1.1 million dollars and have operating margins significantly below the system average. The latest business figures show that Wendy's reported an adjusted earnings per share of 25 cents in the third quarter, a slight decline compared to 27 cents the previous year. Revenue increased by 2.9% to 566.7 million dollars, supported by higher income from advertising funds, franchise fees, and royalty fees. However, a general decline in demand within the industry due to cost-conscious consumers had a negative impact on sales at company-operated restaurants, which recorded margins of 16.5% in the third quarter, nearly unchanged compared to the previous year.