Wendy’s plans to close hundreds U.S. restaurants over the next few months in an effort to boost its profit.
The Dublin, Ohio-based chain said during a conference call with investors Friday that it planned to begin closing restaurants in the fourth quarter of this year. The company said it expected a “mid-single-digit percentage” of its U.S. stores to be affected, but it didn’t give any more details.
Wendy’s ended the third quarter with 6,011 U.S. restaurants. If 5% of those locations were impacted, it would mean 300 store closures.
Ken Cook, Wendy’s interim CEO, said Friday the company believes closing locations that are underperforming – whether it’s from a financial or customer service perspective – will help improve traffic and profitability at its remaining U.S. restaurants.
“When we look at the system today, we have some restaurants that do not elevate the brand and are a drag from a franchisee financial performance perspective. The goal is to address and fix those restaurants,” Cook said during a conference call with investors.
Cook said in some cases, Wendy’s will make improvements to struggling stores, including adding technology or equipment. In other cases, it will transfer ownership to a different operator or close the restaurant altogether.
U.S. fast food chains have been struggling to attract lower-income U.S. consumers in the past few years as inflation has raised prices. In the July-September period, Wendy’s said its U.S. same-store sales, or sales at locations open at least a year, fell 5% compared to the same period last year.
Wendy’s shares dropped 7% Friday. On Monday, they were down 6% in afternoon trading.
