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 will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number two. Thank you. Kelsey Freed, Director of Investor Relations. 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 Penegor, will give a business update and provide details on our plans to deliver accelerated growth behind our strategic initiatives. And our Chief Financial Officer, Gunter Plush, We'll review our 2022 fourth quarter and full year results, as well as our 2023 and long-term outlook. From there, we will open up the line for questions. With that, I will hand things over to Todd.

Thanks, Kelsey, and good morning, everyone. I'm excited to speak to you all again this quarter to share more detail on our strong close to 2022 and how we expect our continued momentum will drive accelerated growth in 2023 and beyond. As we shared in January, we are incredibly proud that last year marked our 12th consecutive year of global same restaurant sales growth. We continue to drive momentum in our US breakfast business, which grew versus the third quarter and peaked at over $3,000 per restaurant per week in Q4. This growth was driven by the continued success of our first major breakfast menu innovation, French toast sticks, and our traffic driving $3 croissant promotion. Our global digital business averaged over 10% sales mix in the fourth quarter and now represents over $1.3 billion business. In the U.S., our strong digital results were driven by growth across both delivery and mobile order channels. Our U.S. loyalty program continued to grow, reaching over 29 million total members at year end, an almost 40% increase versus year end 2021. Internationally, Q4 digital momentum accelerated to approximately 17% of sales, due in part to our recent loyalty launch in Canada, which is exceeding our expectations and driving a sharp uptick in mobile order transactions. And on the development front, we are pleased to have opened over 275 restaurants last year, growing net units by 2.1%. The growth we delivered throughout the year contributed to a step up in company operated restaurant margin, which expanded by almost 300 basis points over the course of 2022. Our successes and the great relationships we have with our franchisees led to us recently being named a top 50 enterprise franchise by Franchise Business Review. As we turn to 2023, we remain focused on driving efficient accelerated growth. We continue to believe that QSR is the place to be, and our mix of convenience, affordability and speed put us in a position to win with our customers and drive further expansion. The momentum we have built and our focus on execution are evident in the step up in our financial outlook that GP will talk through later. 2022 marks our second consecutive year of double digit global same restaurant sales growth on a two year basis. As we shared previously, this growth was driven by widespread strength across our US international segments. In the US, we have now grown or maintained dollar and traffic share of the QSR burger category every quarter for the last seven and five years respectively. This momentum was driven by our strong and balanced marketing calendar and supported by strategic pricing actions. And in Canada, our largest international market, we grew both dollar and traffic share in the fourth quarter and the last three years faster than all QSR Burger competitors. This outstanding performance was driven by our compelling marketing calendar, our focus on accelerating digital, and our breakfast launch. Before sharing our plans for 2023 and beyond, I'll hand things over to GP to talk through our fourth quarter and full-year financial results.