The COVID-19 pandemic hasn't derailed Wendy's vision of being a major player in the fast-food breakfast game.
It perhaps slowed down the timeline on that vision becoming a reality, but definitely did not derail it.
"We're really excited about where this business [breakfast] can go in the future and as part of our earnings, —we do believe it can be a 10% mix of our business by the end of 2022," Wendy's CEO Todd Penegor tells Yahoo Finance Presents. "We've been talking about how it is [breakfast] a billion plus incremental sales layer to our business — so we're a $12 billion system today so at a 10% mix, it would be $1.2 billion."
After years of careful planning and a huge financial investment, Wendy's officially re-entered the breakfast game on March 2, 2020 with a host of new sandwiches, peppery potato wedges and a cold brew coffee infused with Frosty ingredients. Commercials dominated the TV airwaves and social media.
Unfortunately, Wendy's breakfast blitz arrived just as the pandemic triggered mass hysteria around the world. Subsequently, it led to a shuttering of restaurant dining rooms and the near complete evaporation of human mobility.
In other words, there wasn't a need to head to a fast-food joint for a breakfast sandwich — no matter how delicious they tasted. Either you were afraid for your health so didn't venture outside or no longer had a job to drive to in the morning.
Despite the volatile backdrop, Wendy's stayed the course with its breakfast and it appears to have paid off. Breakfast represented a solid 7% of Wendy's fourth quarter sales, Penegor told analysts on an earnings conference call in early March. He said the business was profit accretive to Wendy's.
"We just think there is a huge opportunity," Penegor tells Yahoo Finance on the future of Wendy's breakfast.
This year, Wendy's plans to invest $15 million in incremental advertising for breakfast. Penegor said virtually all of Wendy's franchisees remain fully committed to winning in the breakfast category.
To be sure, the existence of breakfast helped Wendy's fourth quarter global same-restaurant sales to increase 4.7%. Adjusted operating profits rose 37.3% from a year ago.
When Wendy's reported earnings on March 2, it noted U.S. same-restaurant sales were up 6% through the week ended Feb. 21. Global same-restaurant sales were up 5%.
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