Wendy's 2010 Annual Report Download - page 51

Sales
Change
2010 2009
Wendy’s ................................................. $ (54.6) $1,530.5
Arby’s ................................................... (97.9) (67.3)
Bakery and kids’ meal promotion items sold to franchisees ........... (0.5) 72.8
$(153.0) $1,536.0
The decrease in sales in 2010 was primarily driven by one less week of sales when compared to 2009. Sales for
the 53rd week in 2009 for Wendy’s and Arby’s were $35.3 million and $15.9 million, respectively. In addition, sales
in 2010 were negatively impacted by the decline in Wendy’s and Arby’s North America company-owned same-store
sales of 1.7% and 7.1%, respectively. Wendy’s and Arby’s North America company-owned same-store sales for both
2010 and 2009 were impacted by the generally negative economic trends and competitive pressures described in
“Introduction and Executive Overview—Our Business.”
Wendy’s North America company-owned same-store sales for 2010 decreased primarily due to a 1.9% decline
in the number of customer transactions in 2010 as compared to 2009. Wendy’s Canada company-owned same-store
sales decreased $5.9 million primarily due to an increase in value added sales tax in certain Canadian provinces in the
third quarter of 2010. The negative factors impacting Wendy’s sales were partially offset by (1) a $22.4 million
positive impact from foreign currency translation for the year ended January 2, 2011 as compared to the prior year,
and (2) an approximate 1% blended price increase taken primarily in late 2009. Wendy’s locations sold or closed
during or subsequent to the year ended January 3, 2010 resulted in a reduction in sales of $16.7 million for 2010,
which was partially offset by incremental sales of $11.0 million in the year ended January 2, 2011 from new stores
opened during fiscal 2009 and 2010.
The increase in sales in 2009 was primarily due to the Wendy’s Merger. Wendy’s North America company-
owned same-store sales for 2009, excluding the impact of fewer restaurants serving breakfast in 2009 as compared to
2008 and the effect of the 53rd week in 2009, would have decreased approximately 0.3%.
Arby’s North America company-owned same-store sales for 2010 were impacted by the effects of (1) a decrease
of 8.3% in our average per customer check amount primarily as a result of the expansion in 2010 of Arby’s everyday
value strategy, (2) a decrease of approximately 1.2% due to certain in-store promotional discounts that increased
customer traffic during 2009, which did not recur in 2010, and (3) a reduction in advertising expenditures during
2010. These negative factors were somewhat mitigated by a 1.2% increase in the number of customer transactions in
2010 as compared to 2009 primarily driven by expansion of our everyday value strategy. Transaction trends have
improved since the end of 2009, with the most significant increase in the fourth quarter of 2010 as compared to the
same period in 2009. Arby’s locations sold or closed during or subsequent to the 12 months ended January 3, 2010
generated $10.4 million of sales in that period, which was partially offset by sales of $8.0 million in the year ended
January 2, 2011 from stores acquired from a franchisee during the first quarter of 2010.
In 2009, Arby’s company-owned same-store sales decreased 8.2% primarily due to (1) a 7.0% decline in the
number of customer transactions in 2009 as compared to 2008, (2) a decrease of 1.2% in our average per customer
check amount, and (3) a reduction in the number of national advertising campaigns, which was somewhat mitigated
by certain aggressive in-store promotional discounts. These negative factors were partially offset by sales for the 53rd
week in 2009 of $15.9 million.
Franchise Revenues
Change
2010 2009
Wendy’s ................................................... $ (6.4) $228.2
Arby’s ..................................................... (5.0) (6.2)
$(11.4) $222.0
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