Earnings Call Notes Pricesmart and Wendys 4Q13

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.


“I would say that most of the economies are pretty solid, a little bit more challenging Honduras. Right now, they have elections during calendar year 2013 and the government is actually a new government starting January 20th or something like that, this month of January. Every time you have elections, there are some political changes in these countries. There seems to be a slowdown

Hopefully nothing would change and we will see things getting back to normal, but that’s the only market that I would highlight in Central America that that’s more of a challenging or guess, uncertainty right now on Honduras.”


a new QSR standard

“We are, through Image Activation, repositioning the Wendy’s brand experience to that new QSR standard, which is, by the way, the standard that consumers today are expecting. Our product price segmentation strategy is differentiating the Wendy’s brand and growing same-restaurant sales and elevating average unit volumes.”

Why quick serve has taken share:

“So why are they the quick — the sweet spot? Because quick-serve restaurants have done the best job of delivering against the 2 most fundamental needs consumers have: convenience and value. And that is why they have built share against mid-tier restaurants, as well as casual-dining restaurants over this 5-year period of time.

Economics of re-imaging locations and rebuilding locations

“the $450,000 to $650,000, a couple of the key elements of that program. To do a reimage is about 5 weeks of closure time. We are seeing sustainable lifts of 10% to 20% when we do reimages. And we are looking for a 40% profit flow-through on those reimages. And of our total reimage — of our total Image Activation universe, 80% of all of the activity will be reimage.

The other 20% will be the scrape and rebuilds. So I mentioned a lot of the restaurants are in great trade areas with high AUVs. Much better from an economic perspective to actually scrape and rebuild for the long run. The investment is higher, $1.5 million to $1.9 million, about 13 weeks of closure time that we’d have to absorb as we did that activity, but the sustainable sales lifts are higher, 25% to 35% with that same profit flow-through.”