The coronavirus pandemic pushed American businesses to leverage the internet to reach consumers and the same can be said for Wendy’s.
With the help of its loyalty program, the fast-food chain’s digital arm is on its way to make up a larger share of the company’s total sales well ahead of schedule, according to CEO Todd Penegor, who appeared on CNBC Wednesday.
The company now expects digital to make up 10% of sales in 2021.
“We didn’t think we’d get to 10% until 2024, pre-pandemic,” Penegor told Jim Cramer in a “Mad Money” interview. “What we’re doing is driving a lot of active users into our app and people are engaging in the app. We’re seeing a lot more mobile ordering and it’s really because there’s a benefit.”
Wendy’s also found success in the breakfast menu it launched last year. While fewer Americans commuted to the office during the pandemic, disrupting their odds of stopping at a restaurant for a morning breakfast sandwich or coffee, breakfast sales made up about 7% of total sales last year, the company said.
Penegor remained optimistic about being competitive with other restaurants in the morning rush. He expects the breakfast menu to account for 10% of sales by the end of 2022.
“The breakfast business is doing quite well in the face of the pandemic,” he said. “For us to be able to deliver a 7% sales mix on our breakfast day part is quite remarkable and super encouraging. … What we’re seeing is strong repeat.”
Earlier Wednesday, Wendy’s reported fourth-quarter results that missed Wall Street’s estimates on both the top and bottom lines. The company posted total revenues of $474.3 million for the quarter, up 11% from $427.2 the year prior, and net income of $38.7 million, up 46% from $26.5 million. According to FactSet, analysts were looking for revenues of about $476.6 million and net income of $39.9 million.
For the full year, Wendy’s recorded $1.73 million in revenue, a 1.5% increase, and $117.8 million, down 14% from 2019.
U.S. same-restaurant sales increased 5.5% in the quarter and 2% for the full year.
Shares in Wendy’s declined more than 5% Wednesday to a close of $20.12.