Wendy's Co Q1 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Jeffrey Bernstein - Barclays - Analyst : Just looking at the 2025 guide, I know you sounded bullish in early March at your Investor Day, but you are tempering it this morning after just the first quarter. And it seems like by a fairly good amount. So it does seem to demonstrate you expect the first quarter weakness to prevail for the year. Just wondering if you could maybe share your thoughts being new to the quick service restaurant space, it would seem like QSR would benefit or would hope to benefit from retaining the lower income consumer and/or trade down from middle and upper income consumers. That's historically been the calling card for quick service being more defensive in a slow macro. So I'm just wondering, Kirk, how you see quick service positioned currently. And tied to that, just I think you mentioned value a couple of times. I'm just wondering if you're still confident in your current platform kind of led by that Biggie Bag or whether you need to refresh that platform or maybe increase the mix of marketing on value.

Question: David Palmer - Evercore ISI - Analyst : Kirk, definitely, you guys are working on a lot of things. And also you made that comment about putting the consumer at the center. I'm wondering if maybe you could touch on the consumer data. What it's telling you in the key metrics that you care about, drive through speed, value perception, quality of your premium items. Of course, you mentioned something about accuracy there too. But based on your initiatives, where do you see the biggest improvement happening, where are you starting out versus maybe where the brand's been in the past? Where do you see the biggest improvement happening? It feels like you're doing a lot maybe on the quality side through the rest of the year. But I'd love to get your thoughts about where you see the most improvement coming from where you're starting.

Question: Dennis Geiger - UBS Equities - Analyst : I was wondering if you could talk a bit more about the unit development outlook, including any information maybe on the pipeline and sort of overall franchisee demand in the current environment. Solid start to the year. Good to see a reiteration of the full year development targets. But anything sort of on how the current environment might impact demand and plans for '26 looking ahead?

Question: Jon Tower - Citi - Analyst : I'm just curious if you could dig in a little bit to what transpired during the quarter for your business. And specifically, it did sound like obviously, on that in February, you were expecting a soft quarter, and then March came along and was worse than you had anticipated. Can you just dig into how that showed up in your business? Was it broad based? Did you see it specifically show up in certain day parts, weekdays, weekends? And if you can parse out maybe, did you see it specifically at certain income levels? I'm just curious if you could provide any more flavor to that.

Question: Sara Senatore - BofA Global Research - Analyst : Last quarter, I think you said that in 2025, you were redeploying some of the advertising spend to investments in field operations. I was wondering if you think this pullback in spending might have influence or an effect on your performance. I know you mentioned maintaining share, but I think the conventional wisdom says the share of voice should lead your share of market. And we did see some other restaurants improve in March and April. So do you have thoughts on advertising spend or maybe pressing the lever a little bit harder? And then just curious, what was burger traffic down last year, QSR burger traffic? I know you had expected it initially to be flat to down in 2025, down 1%. I'm just curious if you can benchmark for last year.

Question: Brian Bittner - Oppenheimer & Co., Inc. - Analyst : Just around the industry and within your own business, I think we've seen very successful LTOs or promotions such as your time with SpongeBob last quarter and others around the industry are doing similar things. Why do you think that is so effective and how do you think about how to convert those successes into sustainable future comp growth moving forward? And do you have any catalysts like that set for 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 12:30PM, WEN.OQ - Q1 2025 Wendy's Co Earnings Call

Question: Jim Salera - Stephens Inc. - Analyst : I wanted to ask a little bit about the engagement from the consumer with some of these branded partnerships, particularly if we kind of assume maybe a softer consumer for the remainder of the year. We've heard competitors talk about extending value offerings and like QSR pizza is seeing I think a higher frequency of discounting. And so do you have any concern that if some of these offerings on like the Frosty platform and any other collaborations you might have might get drowned out by all of the other value offerings in the channel or do you still think that they can bring incremental traffic to the store even with kind of more value noise out there?

Question: Lauren Silberman - Deutsche Bank - Analyst : So I wanted to follow up on one of the comments from Sara's question. You said burger traffic was down mid single digit in Q1. Does that imply traffic is down closer to high single digit exiting the quarter in April? And then my actual question is on the comp guide. Just want to level set expectations in terms of what you're embedding for the cadence of comps as we move through the year. It sounds like 2Q may be similar to the first quarter. Improvement in 3Q given the initiatives and not sure on the fourth quarter given the tough compare. Is there any color you can give on cadence and perhaps what you're expecting for the international segment versus US, would be helpful.

Question: Margaret Binshtok - Wolfe Research - Analyst : So you launched your revamped Frosty platform in mid April. Can you discuss any early readings and the opportunity you see here, especially when it comes to driving awareness?

Question: Andrew Charles - TD Cowen - Analyst : Kirk, there's an increased focus on chicken across the industry in 2025, particularly in the immediate term. So I'm curious if we look

Question: Danilo Gargiulo - Bernstein - Analyst : Usually around this time, you update on the franchisee cash flow. So I was wondering if you can provide an update on the franchisee cash flows. How much it grew on a year over year basis? And more importantly, as we look into 2025, we have the balance of your guidance embedding some customer macro environment while Abigail is leading operational excellence in the stores, which hopefully is going to be leading to greater EBITDA for franchisee. So can you comment also on what's your expectation for '25 on the balance between these two things?

Question: Rahul Krotthapalli - JPMorgan - Analyst : The question is on the 300 US units planned for the next four years, of which I believe 75% of them you are co-investing in. Given the current trends and outlook revision and if these headwinds were to persist, would you still think this is the right level of development for the US? And at what point would you revisit this given the fact that sales to investment still continues to be around 1 times? And the follow up here is would you take the opportunity of this current environment to manage the US store portfolio more aggressively or asked another way, would the bar for Abigail's performance metrics we discussed in March be notably higher?

Question: Christopher O'Cull - Stifel Nicolaus and Company, Incorporated - Analyst : Kirk, can you give us a sense of the early operational impacts the company is seeing from the fresh AI voice system and maybe any metrics to help frame the system's benefit to labor, order accuracy or any other KPI?

Question: Brian Mullan - Piper Sandler Companies - Analyst : Question on the breakfast day part. In the past, you've referenced that maybe the next leg of growth could come from innovation. Just wondering if you could remind us really any components of the offering where you see the biggest opportunity and how you'll be addressing that either this year or longer term. And related to that, if you could just address the beverage offering at breakfast as you talked about it, we'd love to get your thoughts.

Question: Brian Harbour - Morgan Stanley - Analyst : As this [payer] industry comments about it kind of marks and whatnot. I guess we've -- more recently, as we think about March and April, I think there's some of the top 10 QSR chains that are up year over year solidly, right? And there's others that are more challenged. So it seems like there's kind of a clear share shifting dynamic more recently and is that the case? Are you kind of seeing that based on your data? And what do you think will make the most difference from your perspective to take back some of that share this year?