Wendy's Company (The)

Good morning. Welcome to the Wendy's Company earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. Greg Lemenchuk, Senior Director, Investor Relations and Corporate FP&A. You may begin your conference.

Thank you and good morning, everyone. Today's conference call and webcast includes a PowerPoint presentation, which is available on our investor relations website, irwendys.com. Before we begin, please take note of the safe harbor statement that appears at the end of our earnings release. This disclosure reminds investors that certain information we may discuss today is forward-looking. Various factors could affect our results and cause those results to differ materially from the projections set forth in our forward-looking statements. Also, some of today's comments will reference non-GAAP financial measures. Investors should refer to our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measure at the end of this presentation or in our earnings release. On our conference call today, our President and Chief Executive Officer, Todd Pettigore, will give a business update, and our Chief Financial Officer, Gunter Plush, will review our 2022 first quarter results and provide an update on our outlook for the year. From there, we will open up the line for questions. As a reminder, we will walk through our long-term strategies in detail as part of our upcoming investor day in June. With that, I will hand things over to Todd. Thanks, Greg, and good morning, everyone.

I am extremely pleased with the meaningful progress we made against our three strategic growth pillars in the first quarter, reinforcing the strength and resiliency of the Wendy's brand. We achieved a second consecutive quarter of double-digit, two-year global same-restaurant sales, reaching 15.4% as we lapped one of our best quarters of all time in the prior year. This was an acceleration versus our Q4 on a two-year basis, which highlights the momentum we have in our business across the globe. Our international business achieved another outstanding quarter with widespread success. We have truly shifted past recovery into a compelling growth story with substantially all our markets achieving sales growth versus 2019. Our Latin America and Caribbean region is leading the charge, with two-year same-restaurant sales results approaching 30%, alongside continued strength in Canada, where we continue to take market share, and solid results in our newest market, the UK. In the US, our growth continued despite rolling over stimulus benefits from the prior year and the impact from bad weather early in the quarter. This was on the strength of a few things. Craveable innovation in our hot honey chicken sandwich and biscuit, Fun and distinctive advertising on one of the biggest stages in the world at March Madness. Continued positive customer response to our core improvements like our hot and crispy fries. And an improved operating environment with increased staffing levels and more dining rooms open throughout the quarter. As we sit here today, we have almost all our dining rooms open across the U.S. We are also pleased that we competed very well in the quarter versus our peers as we grew dollar share once again in the quarter. This keeps our streak of growing or maintaining our QSR burger dollar share to an outstanding 11 consecutive quarters. Now let's take a look at our three strategic growth pillars. We achieved one of our best quarters in our history for unit growth, opening more than 90 new restaurants, which is a significant acceleration compared to Q1 and Q4 of last year. This was right on plan and with the strong pipeline we have in place, we remain on track to grow our net new units by five to 6% in 2022. We're also very excited about our recently launched own your opportunity campaign, where we have over 400 parties who have expressed interest in becoming a new Wendy's franchisee. Our digital business accelerated to over 10% of total sales driven by gains across the globe. Internationally, our digital mix reached approximately 17% as our Canadian digital business, which recently launched in-app offers, continued to grow. In the US, we reached approximately 10% digital sales mix, shattering records along the way. Our March Madness promotions proved to be a huge success. They not only drove more people into our app, resulting in over a 10% increase in both total and active users versus Q4, but also an increase in customer frequency and digital sales during the promotion. Rounding out our growth pillars, we delivered solid results at the breakfast day part where we were able to grow our morning meal dollar and traffic share in the QSR burger category, proving that our strong offerings continue to resonate with our customers. The breakfast environment was no doubt challenged across the industry in Q1, impacting our full year breakfast sales growth expectations. We believe that these are short term headwinds and our performance relative to the industry gives us confidence in our ability to hit the low end of our goals to grow breakfast sales by 10 to 20% for the full year and reach average weekly us breakfast sales of approximately 3000 to $3,500 per restaurant by year end. As of last week, we also officially launched breakfast in our Canadian restaurants. We are thrilled about the excitement we're seeing in the market, and we have gotten off to a great start. Finally, at the start of the second quarter, we announced an increase in our share repurchase authorization to $250 million following the successful completion of our $500 million debt raise transaction, which highlights our commitment to returning cash to our shareholders. Getting this deal completed in this tough market was an incredible feat that highlights investor confidence in our long-term growth plan. As we look ahead, we are committed to driving our restaurant economic model, which supports the success of our long-term growth initiatives and is evident in the financial health of our franchisees. We are laser-focused on our mission to build our breakfast day part, accelerate our digital business, and expand our footprint across the globe. We are confident that we have the plans in place to reach our goals, and I could not be more excited to share more about our strategies to deliver a new year of growth at our Investor Day on June the 9th. With that, I will pass it to GP to talk through our first quarter financial results.