NEW YORK: Wendy’s new chief executive on Monday called the dour results of the past few years “self-inflicted wounds” and vowed to do better, laying out plans that include hiring top-tier workers and reclaiming market share from higher-end competitors like Five Guys and Smashburger.
Emil Brolick, chief executive since September, told investors on Monday that he was intent on winning back customers, jaded by a stale menu and inconsistent service, as well as investors, who have grown weary of “a little bit of overpromising and under-delivering.”
And rather than blaming the struggling economy for revenue declines and quarterly losses over the past few years, Brolick said that the company’s problems were its own fault. Though Wendy’s had carved out a niche in the restaurant business as fast food for grown-ups, it had lost its way in recent years.
“These are not DNA issues,” said Brolick, who also worked at Wendy’s during the more halcyon days of the late ’80s and early ’90s. “These are issues we caused, and any time you have self-inflicted wounds, you can correct self-inflicted wounds.”
Brolick said he was intent on taking back market share from fast-casual competitors like Panera and Chipotle, by offering food that is just as good but at a lower price. The company has revamped its menu and is remodeling stores. It sold Arby’s, which had been a drag on earnings, over the summer. And it’s intent on hiring “five star” employees in line with those at the fast-casual chains, Brolick said.
“Those folks at the bottom corner, there’s a job waiting for them at our competitors,” said Brolick, who has also hired a new general counsel at the Ohio headquarters and is adding a chief marketing officer and chief people officer.
Brolick, who was most recently a top executive at Yum Brands Inc., said he’s bringing all Wendy’s locations up to consistent standards for friendliness and cleanliness, rather than the unpredictable state of “one there is really, really good but this one over here isn’t quite what it needs to be.”
“We’ve made great progress in getting rid of those F restaurants and getting more A’s and B’s, but we’re still in that territory,” Brolick said.
Brolick’s message to investors, who gathered at the Nasdaq building in New York, came a few hours after the company reported mixed results for the fourth quarter.
Wendy’s income from continuing operations fell 30 percent to $4.3 million in the last three months of the year, down from $6.1 million in the fourth quarter of 2010. That number has been stripped of the effect of Arby’s, which was sold last summer.
Wendy’s marriage to Arby’s was short-lived. It began in the depths of the financial crisis in fall 2008, and ended when managers said they wanted to focus on the Wendy’s brand alone. Wendy’s said Monday it spent nearly $46 million over 2011 to break up with Arby’s, including severance costs for some employees and retention bonuses for others.
Revenue rose 5.6 percent to $615 million, narrowly beating the $613 million predicted by analysts.