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Wendy’s: Analysts Expect Its Revenues to Rise in 2019

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Analysts’ expectations

For 2019, analysts expect Wendy’s (WEN) to report revenues of $1.70 billion—a rise of 7.0% from $1.59 billion in 2018. The net addition of new restaurants, positive SSSG (same-store sales growth), and the adoption of a new lease accounting standard will likely drive the company’s revenues in 2019. In the first quarter, the company opened 43 restaurants. Wendy’s management expects to increase its unit count 1.5% this year. For Wendy’s 33.3% of the growth is expected to come from international markets, while 66.7% of the growth is expected to come from North America.

Wendy’s is focusing on expanding its delivery service, implementing digital advancements, achieving operational excellence to enhance customers’ experience, menu innovations, and various marketing and promotional initiatives to drive its SSSG.

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By the end of the first quarter, 75% of Wendy’s North American restaurants provided delivery service compared to 60% at the end of 2018. The company plans to expand the service to 80% of its North American restaurants by the end of 2019. Wendy’s is working on integrating delivery to its mobile app. The company expects to finish the integration by the end of this year. On mobile ordering, 75% of Wendy’s US restaurants have activated the service. The company’s management hopes that all of its US restaurants will activate mobile ordering by the end of 2019. To enhance customers’ experience and improve the service speed, Wendy’s plans to roll out digital scanners in North America. The company has selected the vendor. Wendy’s hope to have the digital scanners installed in all of its restaurants in North America by the end of this year.

Peer comparisons

During the same period, Jack in the Box (JACK) and Restaurant Brands International (QSR) are expected to report revenue growth of 10.0% and 4.3%, respectively. McDonald’s (MCD) revenues will likely remain flat.

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