Wendy’s UK business has seen like-for-like sales growth in its 17-strong bricks-and-mortar estate, with the aim of operating 40 sites by the end of the year, according to chief executive Todd Penegor.
The Ohio-based QSR chain issued a Q2 2023 update yesterday, with total revenue of $561.6m in Q2 2023 - an increase of 4.4% on Q2 2022. Global same-restaurant sales growth was 5.1%, in line with expectations, with international growth significant contributing to sales.
Speaking on an investor call following the update, Penegor, alongside chief financial officer Gunther Plosch, said Wendy’s has been making progress towards improving its profitability and restaurant margin in the UK.
“We’re really happy with the progress we are making [in the UK],” Plosch said. “In the second quarter, we improved profitability by about 500 basis points…unfortunately we have catch-up accounting on expenses from the prior year that’s depressed our profitability.”
Wendy’s continues to see interest from franchisees and reiterated its goal of growing its UK estate by the end of 2023 to 40 sites including bricks and mortar, dark kitchens, and drive-thrus.
This is a slight decline from the 45 restaurants projected during Wendy’s Q1 earnings call.
Earlier this year, Penegor revealed Wendy’s first UK drive-thru in Brampton Hut was performing ahead of expectations, with the format seen as a key driver for its UK growth. The chain has since opened a second drive-thru in Colchester.
It plans to pilot voice AI in its US drive-thrus this summer to “drive profitability over time.”
Wendy’s further announced it has signed a master franchise agreement with Flynn Restaurant Group to build 200 sites in Australia by 2034.
It has opened 80 global restaurants in the year to date.
Commenting on the Q2 results, Penegor said: “I am proud of the entire Wendy’s system for delivering another quarter of meaningful sales and profit growth alongside sustained progress against our strategic growth plans. We continued to drive significant profit expansion, supported by strong same-restaurant sales momentum, resulting in an over 200 basis point year-on-year increase in U.S. company-operated restaurant margin.
“During the quarter, our breakfast and late-night dayparts delivered outsized growth and we sustained our digital strength. We also continued to make progress against our development goal with 80 global restaurant openings year to date. With the results we delivered in the first half of the year and the significant runway remaining for each of our strategic growth pillars, I am confident we will deliver our short and long-term outlook, driving meaningful global growth in 2023 and beyond.”
