Wendy’s is accelerating plans to shut down many of its lower performing restaurants globally while also adding a similar number of new locations, executives revealed at an earnings call Thursday.
The fast food chain will close an additional 140 locations this year, Wendy’s Chief Financial Officer Gunther Plosch said on the call. These “outdated” restaurants make far below the system average with average volume unit of approximately $1.1 million.
However, the company plans to replace these sites with more profitable locations with average unit volumes of $2 million and more.
Around 250 to 300 new Wendy’s sites were expected to have opened in 2024, Wendy’s spokesperson Heidi Schauer confirmed to USA TODAY.
“After our strategic review, we now expect a similar number of closures as openings, so we expect net unit growth in 2024 to be roughly flat,” Schauer said in a statement.
Wendy’s President and CEO Kirk Tanner said on the earnings call that these underperforming restaurants will be replaced by new units in more profitable locations.
“When you think about strengthening our system you look at a brand that’s 55 years old and some of those restaurants are just out of date,” Tanner told investors.
He added the company has already launched around 500 locations in the past two years.
By the end of its third financial quarter on Sept. 29, Wendy’s had 7,166 locations including 6,010 in the U.S. and 1,156 internationally.
Executives have not confirmed which sites will shut down, but said closures will be spread out geographically both in the U.S. and globally.
Wendy’s net income for the third financial quarter ending Sept. 29 was $50.2 million, or 25 cents a share, down from last year’s prior period at $58 million, or 28 cents a share.
However it’s revenues rose this year at $566.7 million, compared to 2023’s $550.6 million.
Tanner said the chain looks toward growth through its new locations and offers including its recently launched limited-time Krabby Patty Meal and Pineapple Under the Sea Frosty. Executives also said the company is leaning into its partnership with Coca-Cola Freestyle through its current $1 promotion beverage deal.
“We were excited to bring this fan favorite to life through innovation on two of our iconic core menu items and we are executing this promotion in a way that only Wendy’s can deliver,” Tanner said. “We are very pleased that the initial performance has exceeded our expectation.”
This article originally appeared on USA TODAY: Wendy’s closing 140 low performing restaurants in 2024
