The coronavirus pandemic prompted American companies to use 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 well on track to deliver a larger portion of the company’s total sales well ahead of schedule, said CEO Todd Penegor, who appeared on CNBC on Wednesday.
The company now expects digital to make up 10% of its revenue by 2021.
“We didn’t think we were going to hit 10% until 2024, pre-pandemic,” Penegor told Jim Cramer in a “Mad Money” interview. “What we do is that a lot of active users come into our app and people use the app. We see a lot more mobile ordering and that’s really because there is an advantage.”
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 chance to stop in a restaurant for a breakfast sandwich or morning coffee, breakfast sales accounted for about 7% of total sales last year, the company said.
Penegor remained optimistic about competition from other restaurants in the morning rush hour. He expects the breakfast menu to account for 10% of sales by the end of 2022.
“The breakfast business is doing pretty well in the face of the pandemic,” he said. “For us, it’s remarkable and super encouraging that we can deliver a 7% sales mix on our breakfast portion. … What we’re seeing is a strong repeat.”
Earlier Wednesday, Wendy’s reported fourth-quarter results missing Wall Street estimates both at the top and bottom. The company posted total revenue of $ 474.3 million for the quarter, up 11% from $ 427.2 a year earlier, and net profit of $ 38.7 million, up 46% from $ 26.5 million. Analysts were looking for revenues of approximately $ 476.6 million and net income of $ 39.9 million, according to FactSet.
For the year, Wendy’s posted revenue of $ 1.73 million, an increase of 1.5% and $ 117.8 million, a decrease of 14% from 2019.
Sales of the same restaurants in the US were up 5.5% in the quarter and 2% for the full year.
Shares in Wendy’s fell more than 5% to $ 20.12 on Wednesday.