Emil Brolick, chief executive of The Wendy’s Co., said during the company’s fourth-quarter earnings conference call that the next three years would be “the three most intense years of capital investment in Wendy’s history, as we implement many strategic initiatives.”
In the near term, the Dublin, Ohio-based quick-service chain will continue its reimaging program on a small scale and rebalance its menu with new products and a new marketing campaign, officials said.
The company is projecting same-store sales growth between 2 percent and 3 percent next year as a follow up to fiscal 2011’s same-store sales improvement.
The Wendy’s Co.’s earnings turned out as expected, after preliminary results were released weeks ago at its Investor Day conference. The company reported net income for the fourth quarter of 2011 of $4 million, or 1 cent a share, compared with a loss of $10.8 million, or 3 cents a share, in the same quarter a year earlier.
For the year, the company said it had net income of $9.9 million, or 2 cents a share, versus a year-earlier loss of $4.3 million, or 1 cent a share.
The company said that on a continuing operations basis, or excluding results for the divested Arby’s division, fourth quarter net income was $4.3 million, compared with net income of $6.1 million in the same fiscal 2010 period.
For the year, ongoing operations brought in $17.9 million, versus $18.1 million for fiscal 2010. Consolidated revenue rose 5.6-percent to $615 million, compared with $582.6 million in the fourth quarter of 2010.
Same-store sales in Wendy’s North American system increased 4.4 percent for the quarter, reflecting gains of 5.1 percent at company-owned units and 4.2 percent at franchised locations.
Full-year consolidated revenue rose 2.4 percent to $2.43 billion, from $2.38 billion a year earlier. North American same-store sales rose 1.9 percent, comprising increases of 2 percent at company-owned stores and 1.9 percent at franchised locations.
Building up the reimaging program
Brolick reiterated Wendy’s plans to remodel 50 restaurants and build 20 company-owned units in 2012 to carry the new design of the “Image Activation” reimaging program. About $80 million of Wendy’s planned $225 million in capital expenditures this year will go towards reimaging, which costs between $750,000 and $850,000 per remodel.
“This is not a sprucing up of the restaurants; this is a reimaging of the brand, which is a dramatically different statement,” Brolick said. “Everything we do works better in these restaurants.”
Sales growth at the 10 locations that received the reimaged look in 2011 is exceeding expectations, and Wendy’s is developing financing sources for franchisees to begin adopting the new design, he said.