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Wendy's (WEN) Unveils Development Plans in Central Asia

By Zacks Investment ResearchStock MarketsJun 25, 2021 07:17AM ET
Wendy's (WEN) Unveils Development Plans in Central Asia
By Zacks Investment Research   |  Jun 25, 2021 07:17AM ET
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The Wendy's (NASDAQ:WEN) Company WEN recently announced three expansion agreements with the owners of Kusto Group and Global Investors Limited. This collaboration will help Wendy's bolster its brand expansion in Central Asia within the next nine years.

Through this partnership, Wendy’s is expected to make strong efforts to boost its footprint across The Republic of Georgia, Uzbekistan and Kazakhstan by 2030. The company expects to boost store count to 65 in the region.

In this regard, president and Chief Development Officer of Wendy's, Abigail Pringle, said, "We're excited to expand Wendy's presence across the Central Asia Region with world-class, experienced franchisees that have strong operations experience, local development expertise and a proven track record for growing brands internationally."

Meanwhile, Kusto Group and Wissol Group launched the first two restaurants under this development plan in Kazakhstan. Additionally, it opened a new drive-thru-only restaurant in the Gelovani district of Tbilisi, Georgia.

Focus on International Expansion Bodes Well

Wendy’s is steadfast in expanding its presence globally. The company’s international business is thus poised to be a driver of growth in the future.

Going forward, the company is planning to expand into Europe and is likely to open restaurants in the U.K. in the first half of 2021. The company is on track to open its first restaurant in the U.K. on Jun 2. Overall, it plans to open 250 new restaurants in 2021. Wendy's is expected to achieve its goal of having nearly 7,000 restaurants globally by the end of 2021. Moreover, the company anticipates global unit growth of more than 3% in 2022 and 8,000 global Wendy's restaurants by 2025-end.

Price Performance

Shares of Wendy’s have surged 12.8% in the past three months compared with the Zacks Retail - Restaurants industry’s 2.9% rally. The company has been benefitting from menu innovation, technological upgrades and international expansion. This along with focus on Breakfast daypart offerings bodes well. Going forward, the company is bullish on this business model with plans to boost breakfast daypart sales by 30% in 2021. Also, the company has increased its focus on smaller and efficient prototypes (like Dark Kitchens) that is likely to pave a way for growth opportunities. For 2021, the company anticipates global system-wide sales growth in the range of 8% to 10%. Nonetheless, earnings estimates for 2021 have moved up over the past 30 days, depicting analysts’ optimism regarding the stock’s growth potential.

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Zacks Rank & Other Key Picks

Wendy’s carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the same space include Yum! Brands (NYSE:YUM), Inc. YUM, Red Robin Gourmet (NASDAQ:RRGB) Burgers, Inc. RRGB and Starbucks Corporation (NASDAQ:SBUX) SBUX, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Yum! Brands has a long-term expected earnings per share (three-to-five years) growth rate of 12%.

Red Robin Gourmet Burgers’ earnings for 2021 are expected to surge 98.8% and Starbucks’ earnings for fiscal 2021 are expected to rise 154.7%.

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Wendy's (WEN) Unveils Development Plans in Central Asia

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Wendy's (WEN) Unveils Development Plans in Central Asia

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