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How Did Wendy’s Post Positive Same-Store Sales Growth in 1Q16?

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Same-store sales growth

Same-store sales growth (or SSSG), expressed as a percentage, is a measure of a company’s rise in revenue from its existing restaurants over a certain period of time. SSSG is driven by ticket size and traffic.

Wendy’s Company (WEN) posted systemwide SSSG of 3.4% in 1Q16, with SSSG of 4.8% for its company-owned restaurants and SSSG of 3.2% for its franchised restaurants. In 1Q15, its company-owned restaurants posted SSSG of 2.6%, while its franchised restaurants posted SSSG of 3.2%.

How Did Wendy’s Post Positive Same-Store Sales Growth in 1Q16?

In North America, Wendy’s company-owned restaurants posted SSSG of 4.8%, and its franchised restaurants posted SSSG of 3.5%, making its systemwide SSSG for North America 3.6%.

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Same-store sales growth drivers

The relaunch of its signature hamburgers and its utilization of fresh beef and made-to-order sandwiches drove Wendy’s 1Q16 SSSG. The launch of its Deliciously Different marketing campaign in February 2016, which was focused on communicating the quality of Wendy’s core menu offerings and limited-time offers, also aided in driving SSSG.

The 4 for $4 offering launched in October 2015 continued its momentum from 4Q15, meeting customers’ need for value at high quality. The reimaging of restaurants to enhance the customer experience also helped Wendy’s SSSG. WEN forms 0.16% of the holdings of the SPDR S&P Midcap 400 ETF (MDY).

Peer comparison

In 1Q16, Wendy’s peers McDonald’s (MCD), Jack in the Box (JACK), and Burger King—operating under the umbrella of Restaurant Brands International (QSR)—posted SSSG of 6.2%, 0%, and 4.6%, respectively.

In the next article, we’ll discuss Wendy’s other revenue driver, unit growth.

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