Wendy’s said this year it will infuse $20 million and hire 20,000 workers to open its doors for breakfast system-wide next year in a bid to grow sales and unit volume. Currently, the burger chain offers breakfast at 300 of its audience-appropriate locations, like airports, but next year that will extend to all of the brand’s 6,700-plus stores system-wide, a news release said.
Though the chain has previously tried to get the first daypart meal off the ground in previous decades, this time the brand said it will build a menu of items around the biggest hits from other times of the day, including a breakfast “Baconator,” Frosty-fied Frosty-ccino and a honey butter chicken biscuit, since any QSR player today has to have a chicken in the ring.
“Launching breakfast in our U.S. restaurants nationwide provides incredible growth opportunities,” Wendy’s President and CEO Todd Penegor, said in a release about the daypart addition. “We are well-positioned to pursue it. We believe we have the right team and structure in place, and we put Wendy’s fan favorites on our breakfast menu to set us apart from the competition.”
And the chain will beef up the team that they do have in place, saying that the company and its franchisees expect to hire 20,000 more crew members nationwide to support its launch of “the most important meal of the day.”
This all takes a lot of cash, of course, and Wendy’s anticipates that the breakfast launch will require it to invest $20 million this year to make the plan come to fruition next year. As a result, Wendy’s updated its 2019 outlook to allow for that, but said all other elements of the company’s 2019 outlook remain unchanged.
However, the company is updating its 2020 goals and long-term guidance at its Investor Day on Oct. 11, 2019, including additional details regarding the expected financial impact of entering the breakfast daypart. The company said this year it now expects:
- Adjusted EBITDA to be flat to down 2%.
- Adjusted EPS down 3.5% to 6.5%.
- Cash flows from operations of $290 million-$305 million.
- Free cash flow down 2.5% to 7% to $215 to $225 million.