Tag: Wendys

Wendy’s to open 700 ghost kitchens by 2025 with start-up Reef

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Customers dine at Wendy’s outdoor seating near Union Square in New York City.

Alexi Rosenfeld | Getty Images Entertainment | Getty Images

Wendys announced on Wednesday that it would open 700 ghost kitchens in the USA, Great Britain and Canada by 2025 through a partnership with start-up Reef Technology.

Ghost kitchens, also known as virtual, cloud or dark kitchens, are designed to meet the demand for restaurants outside of the business premises. The facilities fulfill delivery orders that are made via third-party delivery apps such as by Dash. Companies say they are helping restaurants cut costs by using fewer workers, fewer square feet, and being in less desirable locations – as in the case of Reef in parking lots.

Wendy’s CEO Todd Penegor told analysts on Wednesday that its US business saw digital sales grow more than 10% in the second quarter.

Wendy’s and Reef piloted eight ghost kitchens in Canada before creating this development plan. The companies assume that they will be able to open around 50 of the ghost kitchens this year.

“If you look at economics, it is still early to say what we can do with the sale of each of these vessels, but we expect sales between $ 500,000 and $ 1 million per unit,” said Penegor.

The average annual gross revenue of a Wendy’s franchise restaurant in the United States was $ 1.75 million in 2020, according to the franchise’s disclosure documents.

Despite lower expected sales for the ghost kitchen locations, Wendy’s continues to expect solid returns. It will allow the company to expand more into urban locations, and Reef will be responsible for buying the kitchens and hiring workers, Penegor said. The start-up will also pay slightly higher royalties – 6% of gross sales in the US compared to 4% billed to other franchisees.

Penegor also said the program could be a great way to attract new franchisees due to the lower upfront cost.

The deal makes Reef the first Wendy’s franchisee in the UK The burger chain opened its first restaurant on UK soil in decades as part of a broader plan to expand its global reach in June this year.

Founded in 2013 as ParkJockey, Reef only started out as a parking garage operator but has since then branched out in ghost kitchens in shipping containers on more than 4,500 parking spaces. As of February, the startup raised more than $ 756 million, including an investment of SoftBank, according to the pitchbook. Other restaurant partners are BurgerFi and Wow Bao.

Wendy’s shares rose 3.7% in afternoon trading after the company did too reported quarterly profit and revenue that surpassed Wall Street estimates and raised its guidance for 2021. The stock is up 3% this year and has a market value of $ 5.02 billion.

Cramer’s Mad Cash Recap: Activision Blizzard, Wendy’s

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Sometimes stocks go up because of some disfigured logic, Jim Cramer told his Mad Money viewers on Tuesday. This is certainly the case with the Reddit crowd, as these traders are bidding for a stock for almost any reason.

Case in point: Today’s monster rise in Wendy’s inventory (WHOM) – Get the report. There are no fewer than 28 professional analysts covering Wendy’s, and most of them are bullish about the stock after every earnings report. And most of the time nobody cares.

But today Reddit user “Chillznday” announced on the WallStreetBets forum that Wendy’s was the “perfect stock”, especially because the restaurant chain’s summer salad is just so good. That well-founded logic saw Wendy’s shares soar 25.8% to the end, which caught up with most of the restaurant industry.

Cramer is a longtime fan of Wendy’s, calling it an established company with a great CEO and an activist investor who is dedicated to rewarding shareholders. But while he believes in the company’s management and profits, those metrics don’t matter to the WallStreetBets crowd. For them, it’s all about the salads.

In the end, it doesn’t matter why people buy Wendy’s stock, just that they believe in the company. It doesn’t matter if you are a home player or a professional analyst. Every shareholder made a lot of money on Tuesday.

At some point, these meme stocks will run out of breath, Cramer concluded, but we’re still in the early innings and those huge moves are likely to continue to happen.

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Executive decision: Activision Blizzard

In his first “Executive Decision” segment, Cramer spoke to Bobby Kotick, CEO of Activision Blizzard (ATVI) – Get the report, the video game maker, with a 37% share last year.

Kotick attributed Activision’s success to its continued focus on its customers. He said over 425 million people play their games in 190 countries around the world. Whether you’re a serious competitor or just need a quick distraction for a few minutes, Activision has games that customers love.

Kotick also commented on his recent pay cut, saying Activision is a performance-based company and salaries are not a performance metric. He was happy to base his salary on the 25th percentile of their industry and instead rely on stock-based compensation that only rewards him when the company exceeds its goals.

Finally, Kotick talked about their Call of Duty Endowment, which is a veteran help. He said veterans are three times less likely to find work after returning from service, and the foundation hopes to correct that statistic.

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At the time of publication, Cramer’s Action Alerts PLUS had no position in the named holdings.

Wendy’s to hit 10% digital gross sales aim properly forward of schedule, CEO says

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The coronavirus pandemic has pushed American businesses to use the internet to reach consumers, and so has it Wendy’s.

According to CEO Todd Penegor, who appeared on CNBC on Wednesday, the digital arm of the fast food chain is well on its way to getting a bigger share of the company’s total sales with the help of its loyalty program.

The company now expects digital to account for 10% of sales in 2021.

“We didn’t think we would hit 10% by 2024 before the pandemic,” Penegor Jim Cramer said in a “Bad money“Interview”. What we are doing is getting a lot of active users into our app and people are getting involved with the app. We’re seeing a lot more mobile orders and that’s really because there is an advantage. “

Wendy’s also found success in the breakfast menu it launched last year. While fewer Americans commuted to the office during the pandemic, which cut their chances of getting a morning breakfast sandwich or coffee at a restaurant, breakfast sales accounted for about 7% of total revenue last year, the company said.

Penegor remained optimistic about competing with other restaurants in the morning rush. He expects the breakfast menu to account for 10% of sales by the end of 2022.

“The breakfast business is doing quite well in the face of the pandemic,” he said. “For us it is remarkable and very encouraging to be able to achieve a sales mix of 7% on our breakfast day. … What we see is a strong repetition.”

On the previous Wednesday, Wendy reported fourth quarter results that missed Wall Street’s estimates of both profit and profit. The company posted total revenue of $ 474.3 million for the quarter, up 11% from $ 427.2 last year, and net income of $ 38.7 million, up 46% from $ 26.5 million. USD. According to FactSet, analysts were looking for revenue of approximately $ 476.6 million and net income of $ 39.9 million.

For the full year, Wendy’s posted revenue of $ 1.73 million, an increase of 1.5% and a decrease of $ 117.8 million, a decrease of 14% from 2019.

US restaurant revenue increased 5.5% for the quarter and 2% for the full year.

Wendy’s shares fell more than 5% on Wednesday to a closing price of $ 20.12.