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How Wendy's plans to take over every daypart


Wendy’s reported Q2 results Wednesday, including systemwide sales growth of 6.9% led by a 12.7% increase in the company’s international business. In the U.S., systemwide sales were up 6.1%, while domestic same-store sales were up 5.1% on the quarter.

U.S. company-owned restaurant margins improved to 17.3% of sales, versus 15% a year ago, driven by higher average check. The increase was partially offset by higher labor and commodity costs, as well as customer count declines. During an earnings call Wednesday morning, CEO Todd Penegor touted the company’s “significant profit expansion,” as well as stronger cash flow.

No surprise, both the morning and late-night dayparts were in the spotlight during the call, as they were during the company’s last earnings call in May. On the breakfast side, Penegor said Wendy’s experienced the highest quarterly breakfast sales volumes of all time, supported by its $3 croissant promotion launched in late March. The daypart experienced mid-single-digit sales growth and the company expects this momentum to continue with its new Frosty Cream Cold Brew and “additional menu innovations launching soon.” Rumors have swirled that those innovations could include a pumpkin spice-flavored lineup. Penegor is bullish about the breakfast daypart throughout the rest of this year because of these innovations, as well as more consistent promotional activity aimed at driving trial and repeat visits.

Bookending that breakfast business is Wendy’s late-night daypart. The company recently began advertising its late-night offerings for the first time in four years and 90% of its restaurants are now open until at least midnight. The daypart experienced double-digit sales growth last quarter.

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