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wendysbreakfastmanhattan.jpg Gloria Dawson
Wendy's has been testing breakfast in select locations.

Wendy's: We are fully staffed and ready for breakfast

Quick-service chain reports for Q4 and touts focus on digital, delivery and international markets

Wendy's breakfast doesn't launch systemwide until March 2, but it was the talk of the Dublin, Ohio-based burger chain's fourth-quarter earnings call. 

"We could not be more excited about our upcoming breakfast launch. A lot of work has been completed and our system is fully staffed and trained. We are ready to launch what we believe will be America's favorite breakfast," said Todd Penegor, CEO of Wendy's, during the company's earnings call. 

The brand has been testing the menu, which includes nine menu items plus coffee drinks, across the country for a few months while gearing up for the systemwide launch. Entering a new daypart like breakfast, something Wendy's has tried in the past, isn't easy. But executives have said they've got strong franchisee support, in part because they've made it easy on the operations side. For example, the Frosty-ccino uses the same mix as Wendy's Frostys. The Breakfast Baconator is a similar build to Wendy's traditional Baconator. 

"There is strong customer demand for breakfast at Wendy's, and our franchise system is fully aligned to this launch," Penegor said. The chain expects breakfast to make up 6%-8% of sales in 2020. 

The breakfast space, or the breakfast wars as some are calling them, is highly competitive. But Wendy's has taken its usual snarky and off-beat approach to fight the competition. Mike Haracz, a former McDonald's corporate chef, is in on the fisticuffs. In a video from Wendy’s he is shown eating and enjoying items from new breakfast menu. During 2020, the company plans to spend approximately $70 to $80 million in advertising the breakfast daypart.  

While Wendy's has left a few international markets recently, including Brazil and Malaysia, it's focusing on other global markets and planning to launch in the U.K. and elsewhere in Europe. The brand believes breakfast will perform well in European countries.

On the digital front, the brand is adding new delivery partners and planning to launch a new loyalty program.

For the fourth quarter ended December 29, 2019, net income was $26.5 million, compared to $18.8 million in the same quarter last year. For the year, net income was $136.9 million in 2019, compared to $460.1 million in 2018. The decrease was primarily the result of the sale of ownership interest in Inspire Brands in the third quarter of 2018 for $450 million. 

Global systemwide sales increased 5.9% for the quarter. Total revenues were $427.2 million in the fourth quarter of 2019, compared to $397.8 in the same quarter of 2018. Global same-store sales growth was up 4.3%. Adjusted earnings per share was $0.08 in the fourth quarter of 2019, compared to $0.16 in the same quarter of 2018. There are more than 6,700 Wendy's restaurants worldwide. 

Contact Gloria Dawson at [email protected]

Follow her on Twitter: @GloriaDawson

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