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, Kirk Tanner, and our Chief Financial Officer, Gunther Plush, will give a business update, review our fourth quarter and full year 2023 results, and share our 2024 financial outlook. From there, we will open up the line for questions. And with that, I'll hand things over to Kirk.

Thanks, Kelsey. And good morning, everyone. Before we get started today, I wanted to share how fired up I am about the opportunity to join the Wendy's team and lead this iconic brand. I've been a Wendy's fan my whole life. And what drove me to make this move was not just the amazing brand heritage, but the incredible potential I see in this business. I am confident that you will be just as energized about our future as I am after hearing our plans to drive profitable growth. Throughout my career, I have taken a customer-centric mindset coupled with strong operational execution to guide growth and deliver on strategic objectives. I feel strongly that my experience and leadership philosophy will support our success, and I am excited to bring this perspective to Wendy's at such a pivotal time for the brand and industry. In my first nine days, I've had the opportunity to meet with many members of the team and some of our passionate franchisees. I look forward to spending more time with others across the Wendy's system and our investment community in the coming weeks. When I look at Wendy's, I see the highest quality food in the QSR industry, which has built a very strong foundation of sales and profit alongside a very healthy balance sheet. This foundation will serve as a springboard to drive what matters most accelerated sales and unit growth. So the brand can reach its full potential. Our commitment to growth has never been stronger. And I believe that our strategic focus on driving global same restaurant sales momentum, accelerating our digital business and expanding our footprint are the keys to unlocking our next chapter and becoming an even more formidable global competitor. Today, you'll hear our plans to invest behind these pillars to build a growth engine that drives an acceleration in sales growth, footprint expansion, and margin enhancement to level up the Wendy's brand for years to come. Before we dive into our profitable growth strategies, I'd like to take a moment to recognize the team's accomplishments last year. We delivered strong 2023 results, driving sales and profit growth as we made continued progress on our strategic growth pillars. This marks our 13th consecutive year of global same restaurant sales growth, which highlights our consistent execution and dedication to growing the Wendy's brand. Our international business achieved 8.1% same restaurant sales growth in 2023, laddering up to 20.5% on a two-year basis and extending to 11 consecutive quarters of double-digit two-year same restaurant sales growth. This success supported a record number of international new restaurants opening in 2023 and is a key enabler of our international expansion in the coming years. Our U.S. business reached 3.7% same restaurant sales growth in 2023, resulting in 7.6% on a two-year basis. This growth allowed us to maintain our dollar and traffic share within the qsr burger category each quarter of 2023. We delivered meaningful year over year digital sales growth every quarter growing nearly 30% across the full year to almost $2 billion, which was well ahead of our original expectations. We reached a record high, 14.5% global digital sales mix in the fourth quarter, supported by strength across all channels as we built more personalized relationships with our loyalty members and continued to provide great in-restaurant experiences. Our sales expansion and lower commodity inflation supported a 100 basis point year-over-year increase in U.S. company-operated restaurant margin to 15.3%. This return to pre coven margin sets the stage for even further improvement in profitability moving forward we close the year strong from a restaurant development perspective, bringing our full year openings to 248. On a net basis, we achieved our goal of 2% net unit growth with 75% of that growth in international markets. Finally, we remain disciplined in our capital allocation policy, including 100% increase in our dividend rate and return nearly $400 million to shareholders in 2023. All this momentum sets a strong foundation for our growth in the coming years. I will now turn it over to GP to share our fourth quarter and full year financial results.