Wendy's to Take On Fast Casual, Expand Breakfast

NEW YORK -- Wendy's CEO Emil Brolick plans to beat fast-casual rivals, expand the chain’s breakfast offerings nationwide and move into international markets such as Russia and Japan, according to a Wall Street Journal report, citing Brolick’s comments during a recent call with analysts.

The fast-food chain has had a rocky few months: Wendy's lost almost $4 million during a time period roughly covering July through September. During the same time period last year, it lost $909,000. The loss was primarily due to costs related to July's sale of Arby's to a private-equity firm, the WSJ reported. The Wendy's/Arby's Group had been combined for less than three years, but lost money in seven of the 10 quarters for which the company reported results.

Although Wendy's revenue fell short of expectations, it rose 2 percent to $611 million, according to the report. To continue that growth, Brolick plans to focus on quality, hopefully prompting customers to pay slightly more for food that is worth it, yet still lower-priced than fast-casual menu items.

"I'm not for the moment suggesting that we want to try to pretend to become a Five Guys or a Smashburger or something like that," Brolick said during the call with analysts. "But I do believe that there is a significant opportunity in the marketplace for higher-quality products that are fresh, made-to-order products."

The company has experimented with new ingredients and preparation methods, and experienced some positive results. Brolick noted that the chain’s Dave's Hot 'N Juicy burgers "exceeded our expectations" and would bring back Wendy's "leadership in the premium-quality hamburger category."

Brolick also said Wendy's will introduce a mid-tier "W" cheeseburger line later this month and make its breakfast program a nationwide institution. Currently, it is the only major fast food chain that does not offer breakfast nationally.

Additionally, while only 300 of Wendy's approximately 6,600 locations are outside the United States, the company is reportedly growing overseas. Brolick announced that the company has made agreements to increase its overseas restaurant count to 1,000, including locations in Russia and Japan.