Wendy’s 4Q23: U.S. Comps +0.9%, U.S. Company Store Margin -1.6%

Feb 21, 2024 | Insights, Restaurant Research

Wendy’s reported that while the consumer is under pressure (resulting in a soft 4Q23 for the industry), prospects are looking up. The brand’s barbell menu strategy is working well to address the traffic decline for low-income consumers (under $75k) with its Biggie Bag value platform while ensuring higher-income consumers are well served with premium Made to Crave offerings.


  • Net disposable income & miles driven are key sales drivers and net disposable income is expected to increase sequentially, reflecting full employment & declining gross inflation. Declining fuel costs should increase driving around mobility.


  • U.S. same-store-sale comps increased +0.9% y/y during 4Q23 (including +4.5% pricing) & +3.7% for the full year 2023 (+7.6% on a 2-year basis last year).
  • Wendy’s maintained its dollar & traffic share within the QSR burger category each quarter during 2023.
  • Digital sales grew +30% y/y during 2023 to almost $2B (14.5% global digital sales mix during 4Q).
  • The chain’s high check late-night daypart sales grew mid-teens y/y during the quarter & 90% of company stores are now open to midnight or later.
  • 2024 guidance calls for global same-restaurant sales growth of +3% to +4% & global net unit growth of over +2%.

Breakfast: #3 Market Position in the U.S.

  • Management is excited about the prospect for its breakfast daypart in terms of sales growth & margin acceleration opportunities (the addition of incremental labor is not necessary to service breakfast sales).
  • Breakfast sales should benefit from plans to invest $55MM in incremental company advertising in the U.S. & Canada, split evenly over the next 2 years. This investment is expected to drive a 50% increase in weekly U.S. breakfast sales per restaurant over the next 2 years to $6,000 per restaurant.
  • Incremental ads will support an increase in breakfast menu innovation, following the launch of its breakfast Burrito & Cinnabon Pull-Aparts that drove trial & frequency.
  • Breakfast is expected to drive 1/3 of the chain’s total going forward comp growth.

Marketing, Digital & Menu

  • The brand plans to advertise again during March Madness.
  • A $50MM investment during 2024 will enhance its app experience & loyalty capabilities.
  • A new customer data platform enhances the chain’s ability to act on customer data through segmentation & machine learning, sufficient to drive a meaningful increase in loyalty member personalization.
  • Plans to build on its popular Made to Crave platform with new premium flavors – “big news” coming for its Frosty product line.
  • Game-changing innovation is planned for its chicken lineup.
  • Compelling everyday value will continue to be offered over its Biggie Bag platform.

Operations & Margins

  • Progress reported for customer satisfaction, taste, accuracy & speed scores during 2023.
  • Plans to invest $20MM to roll out digital menu boards to all U.S. company-operated restaurants by the end of 2025 & another $10MM over the next 2 years to support digital menu board enhancements for the global system that will include dynamic pricing & daypart offerings, AI-enabled menu changes and suggestive selling.
  • U.S. company-operated restaurant margin declined to 13.5% during 4Q, primarily reflecting commodity inflation of mid-single digits, customer count declines & labor inflation of almost +4%.
  • Full-year 2024 U.S. company-operated restaurant margins are expected to increase +1% y/y to 16% to 17%, reflecting prospects of sales growth (including low single-digit cumulative pricing) & flat commodity inflation (chicken deflation offset by beef & fries inflation).
  • 2024 labor inflation should remain in the +3% to +5% range.

Wendys 4Q23 Financials

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