Wendy’s to revamp operations as consumers tighten spending

Wendy company

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He said on Friday that two executives were leaving the burger chain amid a broader regulatory overhaul that could include staff cuts and new investment.

Trian Fund Management LP, Wendy’s largest shareholder, also said Friday that it has been delayed Lobbying for potential strategic alternatives For the sake of the company. The activist hedge fund company said in May that it intends to explore a potential deal involving Wendy’s, either on its own or with third parties, which could include an acquisition, merger or other transaction.

Trian said Friday that Wendy’s business momentum supports a new plan to allocate capital instead. Wendy’s said it was doubling its dividend and increasing its share repurchase program.

The company reported preliminary fourth-quarter results on Friday, which showed same-store sales grew nearly 6% in the US in the three months ended January 1, compared to the prior-year period. Wendy’s said it opened 38 U.S. restaurants and closed 41 domestic locations during the quarter.

As the US economy shows signs of abating, consumer demand has generally held up Fast food restaurants, although companies noted a decline in spending among people with lower incomes. Wendy’s said Friday that more customers are turning to the chain’s restaurants in search of bargains.

“We continue to see a slightly more distressed consumer,” Wendy’s CEO Todd Bennigor said during a conference call with investors on Friday.

Wendy’s shares were up 5% at $22.87 in morning trade. They’re down 2.85% over the last 12 months.

Wendy’s said it is re-evaluating some of its new investments given the current economic trajectory, and plans to better connect its US and global operations. The company said it was in the process of cutting back on an earlier test To build sites to go only With startup Reef Global Inc. It will focus on building traditional units instead. Mr Penegor said Wendy’s is also looking at its headcount.

As part of the reorganization, the Dublin, Ohio-based fast food company said Lee Burnside, its US chief accounting officer and chief financial officer, is stepping down to become chief financial officer of a different restaurant company.

US President and Chief Commercial Officer Kurt Kane is also departing after his position is axed in what the company described as a “broader redesign of its organizational structure” aimed at keeping general and administrative costs down in the coming years. The company said in a statement that the company will pay Mr. Kane compensation for the termination without cause.

Mr Penegor said Wendy plans to outline further organizational changes in the next 45 days to help reduce costs and boost its efficiency.

Other US companies this month announced cost cuts and restructuring plans as the economic downturn looms.

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He said last week that planned to do “Tough” decisions about potential changes to the company’s staffing levels by April, as part of a broader strategic plan for the burger giant.

Wendy’s said Friday that its fourth-quarter revenue is expected to come in at $536.5 million, up from last year’s $473.2 million and above analyst expectations of $518.3 million, according to FactSet.

Wendy’s said Friday it was doubling its quarterly cash dividend to 25 cents a share. The company said the increase will begin when the first-quarter dividend is paid in March.

The company’s board also canceled a $250 million share buyback program, which was set to expire next month, and replaced it with a $500 million buyback plan that expires in February 2027.

Nelson Peltz, co-founder of Trian, said Friday that the new capital allocation strategy will support the company’s long-term growth plans.

After Trian announced it was paying Wendy’s to explore potential strategic alternatives last spring, some investors were hoping to sell the company, sending Wendy’s stock soaring. Deals slowed Last year as interest rates rose, financing tightened and the US recession

Mr. Peltz’s Trian is an old investor in the chain. activist investor Headlines lately To fight a proxy battle against

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Write to Heather Haddon at [email protected] and Dean Seal at [email protected]

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