Wendy鈥檚 plans to close hundreds U.S. restaurants over the next few months in an effort to boost its profit and make its remaining stores more appealing.
The Dublin, Ohio-based chain said during a conference call with investors Friday that it planned to begin closing restaurants in the fourth quarter of this year. The company said it expected a 鈥渕id-single-digit percentage鈥� of its U.S. stores to be affected, but it didn’t give any more details.
Wendy鈥檚 ended the third quarter with 6,011 U.S. restaurants. If 5% of those locations were impacted, it would mean 300 store closures.
The new round of closures comes on top of the in 2024. At the time, Wendy’s said that many of the 55-year-old chain’s restaurants are simply out of date.
Ken Cook, Wendy鈥檚 interim CEO, said Friday the company believes closing locations that are underperforming 鈥� whether it鈥檚 from a financial or customer service perspective 鈥� will help improve traffic and profitability at its remaining U.S. restaurants.
Cook became Wendy鈥檚 CEO in July after the company’s previous CEO, Kirk Tanner, left to become the president and CEO of Hershey Co.
鈥淲hen we look at the system today, we have some restaurants that do not elevate the brand and are a drag from a franchisee financial performance perspective. The goal is to address and fix those restaurants,鈥� Cook said during a conference call with investors.
Cook said in some cases, Wendy鈥檚 will make improvements to struggling stores, including adding technology or equipment. In other cases, it will transfer ownership to a different operator or close the restaurant altogether.
U.S. fast food chains have been struggling to attract lower-income consumers in the past few years as inflation has raised prices. Cook said he expects lower-income consumers to remain pressured for the rest of this year.
In the first nine months of this year, Wendy鈥檚 said its U.S. same-store sales, or sales at locations open at least a year, fell 4% compared to the same period last year. Wendy’s revenue fell 2% to $1.63 billion in the same period, while its net income fell 6% to $138.6 million.
Cook said $5 and $8 meal deals 鈥� which have been 鈥� have helped bring some traffic back to its U.S. stores. But Wendy’s isn’t doing a good job of bringing in new customers, Cook said, so the company plans to shift its marketing to emphasize its value and the freshness of its ingredients.
Wendy’s shares dropped 7% Friday. On Monday, they were down 5% in afternoon trading.
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