Shares of Wendy's (NASDAQ:WEN) were heating up today after the fast-food chain announced bold new plans at its Investor Day conference this morning, including new details on its nationwide breakfast launch and expansion into Europe. The company also provided a strong performance update for the third quarter.
Investors cheered the news, sending the stock up 5.4% as of 10:54 a.m. EDT.
Wendy's said comparable-store sales rose 4.4% in the third quarter, its best performance since 2015, boosted by its spicy chicken nuggets. It also said that digital sales are up 325% so far this year, though they only make up 2% of its sales. The company sees that as a growth driver over the next five years as it aims for the digital channel to make up 10% of sales. It also plans to begin working with other delivery apps besides DoorDash.
The company said it would launch in Europe in the next 12 to 18 months, starting in the U.K., to take advantage of a market that has richly rewarded peers like McDonald's and Burger King. Management set a goal of doubling sales outside of the U.S. to $2 billion by 2024.
Finally, the company addressed concerns about its upcoming breakfast launch, which it had first announced in September. It said that it had learned from previous mistakes, that there would be no incremental equipment costs for franchisees, and that only a small staff would be required to make the morning meal, meaning it should be a high-margin business for franchisees. It expects breakfast to make up 10% of the day's sales.
The updates all painted a picture of a restaurant chain moving in the right direction, seeing healthy growth, and tapping a number of new opportunities including digital, delivery, Europe, and breakfast. Considering the boom that delivery apps have set off in restaurant stocks recently, Wendy's should continue to see steady growth.