The Wendy's (WEN)
Q3 2011 Earnings Call
November 09, 2011 11:00 am ET
Stephen E. Hare - Chief Financial Officer and Senior Vice President
Emil J. Brolick - Chief Executive Officer, President and Director
John D. Barker - Chief Communications Officer and Senior Vice President
Howard W. Penney - Hedgeye Risk Management LLC
David Palmer - UBS Investment Bank, Research Division
John S. Glass - Morgan Stanley, Research Division
Phillip Juhan - BMO Capital Markets U.S.
Jeffrey Andrew Bernstein - Barclays Capital, Research Division
Joseph T. Buckley - BofA Merrill Lynch, Research Division
Michael W. Gallo - CL King & Associates, Inc.
Jason West - Deutsche Bank AG, Research Division
Christopher T. O'Cull - SunTrust Robinson Humphrey, Inc., Research Division
Previous Statements by WEN
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John D. Barker
Thanks. Good morning, everybody. This morning, we issued our third quarter 2011 earnings release, and we also filed our Form 10-Q. The agenda for today's call and the webcast will include comments from our President and CEO, Emil Brolick. Our Chief Financial Officer, Steve Hare, will then review our third quarter financial results, as well as our 2011 outlook. And then afterwards, we'll open up the line for questions.
As a reminder, due to the sale of Arby's, the restaurant group, on July 4, 2011, Arby's results of operations are reflected at discontinued operations. Today's conference call and our webcast is accompanied by a PowerPoint presentation that can be found on our Investor Relations page on our corporate website, which is www.aboutwendys.com. For those of you who are listening by phone today, make sure you select the appropriate webcast player option from our website and that will make sure that you can sync up with the slides and the audio.
Before we begin, I'd like to just take a minute to read you the Safe Harbor statement that is attached to today's release. Certain information that we may discuss today regarding future performance such as financial goals, plans, development is forward-looking. Various factors could affect the company's results and cause those results to differ materially from those expressed in our forward-looking statements. Some of those factors are referenced in the Safe Harbor statement that is attached to the news release. Also some of the comments today will reference non-GAAP financial measures such as earnings before interest, taxes, depreciation and amortization. Investors should refer to our reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure.
As you know by now, Emil Brolick took over as our CEO of The Wendy's Company on September 12. And because this is his first quarterly earnings call with us, I'd like to provide just a little bit of background about Emil. He joined Wendy's from Yum! Brands where he had held several leadership positions including President and Chief Concept Officer of Taco Bell, President of U.S. Brand Building, Chief Operating Officer and President of A&W All-American Foods and Long John Silver's. Prior to his time at Yum!, he worked at Wendy's for 12 years, lastly, serving as our Senior Vice President of New Product Marketing, Research and Strategic Planning. During his time at Wendy's, Emil worked closely with Wendy's founder, Dave Thomas. And we are very excited to have him back.
Let me turn the call over to Emil.
Emil J. Brolick
Thank you, John. Good morning, and thank you for joining The Wendy's third quarter earnings call. It's quite an honor to have the opportunity to lead The Wendy's brand to -- and to build upon the good work of Roland Smith, David Karam and Steve Hare. Moving forward, the goal is simple: return The Wendy's brand to the luster and performance of the 90s and 2000s, the period of time when the brand enjoyed 16 years of consecutive same-store sales growth. The turnaround of The Wendy's brand has already begun, but to sustain brand sales and profit growth will take a cohesive effort of company and franchise operators united in reigniting the brand vision of our founder, Dave Thomas, and by being true to the very high people and operating standards of brand legends, Jim Near and Gordon Teter, all of whom I had the privilege of knowing and working with.
My first 2 months in position could not have been better. Franchisees and employees had been very welcoming as has been Nelson Peltz, Peter May and the entire Wendy's Board of Directors.
In mid-October, we held our National Franchise Convention in Las Vegas with an all-time record attendance in both domestic and international franchisees, as well as record supplier participation. The mood was very upbeat. The Wendy's family is excited and committed to the operating effort and capital that it will take to continue the momentum that is building in The Wendy's brand. This excitement is, in large part, due to the significant success achieved by the launch of the Dave's Hot 'n Juicy hamburger line, featuring our signature fresh, never-frozen North American beef, 2 slices of cheese, crisp leaf lettuce, red ripe tomatoes, red onions and crinkle-cut pickles, all on a warm butter-toasted bun. Sounds great. And customers' response has been excellent. And importantly, sales have exceeded our expectations.
For example, we would have to go back to early April/May of 2004 to find a 5-week period of sales growth higher than the most recent 5 weeks in sales. We are pleased with this performance, but we know that the key for investors is consistent sales and profit growth over a sustained period of time. Since the beginning of the Asiago Ranch Chicken Club national marketing message on October 31, our sales momentum has held nicely, giving us a great start to the fourth quarter. We are confident that with the strong results of Dave's Hot 'n Juicy and the continued sales strength with Asiago Ranch Chicken Club, we will be able to move to third quarter year-to-date same-store sales growth of 1.1% to the middle of our annual target of 1% to 3% same-store sales growth by year end.