Wendy’s (WEN) 2Q16 Earnings Call Notes

Eating at home has gotten cheaper

“But the hamburger sub-segment has been flattish. And I do think this food at home versus food away from home gap does impact it…it’s gotten a lot more cheaper relatively speaking to go get fresh beef at your local butcher and go home and grill it. So that does have a bit of an impact.” Todd A. Penegor – President, Chief Executive Officer & Director


Low wage growth and economic uncertainty have also made eating at home more attractive

“the cost of eating at home versus the cost of eating in the restaurants, it’s about 3x delta. And when a consumer is a little uncertain around their future and really trying to figure out what this election cycle really means to them, they’re not as apt to spend as freely as they might have even just a couple of quarters ago. And it’s at a time where we’re still not seeing real wage growth, but we are seeing some of the cost of living move up when you get into what does it cost to own an home and operate your life in general. And there is a little bit of tightening on the disposable income, especially on the low-end…And that’s why we’re investing so much back into our food to really make sure that we widen the quality gap…we want to create a new QSR experience at traditional QSR prices and that’s why we think we’re uniquely positioned to win in this environment.” Todd A. Penegor – President, Chief Executive Officer & Director


Optimization strategy delegates restaurants to strong regional operators and facilitates franchisee to franchisee transfers

“The decision to divide up the New York market is consistent with our strategy to maintain restaurants in different parts of the country and with various demographics to reflect the diversity of our marketplace and to maintain the scale necessary to be operationally efficient where geographic concentration allows. System optimization is all about building an even stronger system and serving as a catalyst for growth by putting restaurants in the hands of strong operators who are committed to driving new restaurant development and accelerating reimaging.” Todd A. Penegor – President, Chief Executive Officer & Director