Wendy’s Bets on Breakfast To Get Past Q2 Earnings Slump

Wendy’s didn’t reach its Q2 earnings expectations, and the company is hoping that its breakfast strategy will turn the proverbial ship around.

According to Quartz, the Q2 earnings revealed that the fast-food chain over-performed in the breakfast category despite falling short overall.

“Breakfast remains an incredibly important daypart,” said Kirk Tanner, CEO of Wendy’s, during the earnings call. “It is highly profitable, and we have not yet reached our potential.”

The chain brought approximately $570 million in revenue during the second quarter, or around 27 cents per share. This is slightly lower than the $577 million, or 28 cents per share, that analysts predicted.

With a presence of more than 7,000 locations, Wendy’s has already established 99 additional locations this year. By late 2024, it hopes to have built and opened new 250 to 300 outlets.

Wendy’s is demonstrating that its value meals are giving the chain a competitive edge as customers hunt for offers. The restaurant introduced its $3 breakfast bundle in May and reintroduced its $5 Biggie Bag a month later. The chain still offers a 4 for $4 dinner bargain, but these promos are different.

However, breakfast seems to be popular, as Tanner noted, “We continue to outperform competitors by driving breakfast dollar growth ahead of the category in the second quarter.”

He added, “We continue to expect that breakfast sales growth will outpace the rest of the day at Wendy’s.”

According to the chain, its 2024 investment level has been streamlined to enable it to expand its current “breakfast advertising investment horizon beyond 2025.” During that time, the business intends to invest over $25 million in breakfast, partly due to its strong market optimism.

Tanner’s bullish predictions about breakfast come in the wake of his recent backlash over surge pricing. The CEO announced during a February earnings call that the business would begin experimenting with dynamic pricing, which includes presenting digital menus that can frequently change prices and options.

In response to online criticism from customers regarding possible price increases, a representative stated that Wendy’s had no intention of enacting surge pricing. The restaurant business declared that its digital menu boards would prioritize offering consumers discounts in a more effective manner.