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Wendy’s Co.
said it is targeting systemwide sales growth in the mid-single digits through 2025 as it embarks on a restructuring plan to streamline costs.
The fast-food chain, based in Dublin, Ohio, said earlier this year that it was reorganizing in an effort to trim costs, a move that comes amid some signs of softening throughout the U.S. economy.
Wendy’s said Wednesday that its board approved the restructuring plan last month and that it will result in $11 million to $13 million in costs. The plan is expected to hold general and administrative costs flat for the next two years.
For 2023, the company expects global systemwide sales to grow 6% to 8%, compared with growth of 6.8% last year. Wendy’s adjusted earnings guidance for the year was roughly in line with analysts’ expectations, according to FactSet.
“I am confident that Wendy’s best days are yet to come,” Chief Executive
Todd Penegor
said.
Shares rose almost 2% to $22.35 in premarket trading.
The long-term guidance from Wendy’s comes as demand at fast-food restaurants has generally held up, though some companies have noted a pullback in spending. Last week,
Domino’s Pizza Inc.
said its U.S. delivery business was suffering because consumers are cooking their own food at home to save money.
Like Wendy’s, other U.S. companies have set out on cost-cutting plans amid economic uncertainty.
McDonald’s Corp.
said earlier this year that it planned to make difficult decisions about potential changes to its corporate staffing levels by April, as part of a strategic plan for the food company.
Wendy’s announced its own plan to revamp operations in January, at the same time that Trian Fund Management LP, Wendy’s largest shareholder, said it was putting on hold its push for potential strategic alternatives. The activist hedge fund said last year that it intended to explore a potential deal involving Wendy’s, either alone or with third parties, that could include an acquisition, merger or other deal.
At the same time, Wendy’s reported preliminary results for its fourth quarter, which matched the figures issued on Wednesday. For the three months ended Jan. 1, the company posted a profit of $41.3 million, or 19 cents a share, down from $52.1 million, or 24 cents a share, in the same period a year earlier. Adjusted earnings came to 22 cents a share, two cents above Wall Street expectations, according to FactSet.
Overall revenue rose 13.4% to $536.6 million, as reported in January.
Write to Will Feuer at Will.Feuer@wsj.com
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Appeared in the March 2, 2023, print edition as ‘Wendy’s Focuses on Growth, Cost Cuts Amid Signs of Softening U.S. Economy.’
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