Wendy's says McDonald's fresh beef tests aren't hurting its sales

Key Points
  • Wendy's said Wednesday that McDonald's tests of fresh beef didn't have "material impact" on the chain.
  • The company said that McDonald's test actually brought awareness and credibility to Wendy's.
  • CEO Todd Penegor said that Wendy's was able to gain about 0.6 percent in consumer traffic share during the first quarter.
Source: Wendy's

It seems McDonald's foray into fresh, never frozen beef hasn't hurt Wendy's sales.

In fact, Wendy's said that the Golden Arches' test of Quarter Pounders with fresh beef actually brought more awareness and credibility to Wendy's business, which has used fresh beef since 1969.

"As we looked at where they were testing, and we were very conscious of what what they were doing, we didn't see a material impact to our business where that message was coming out," Todd Penegor, CEO of Wendy's, said during an earnings call Wednesday.

Penegor said that the company was actually able to use social media to capitalize on McDonald's announcement that it would be rolling out fresh beef for all of its Quarter Pounder burgers nationwide by mid-2018. Wendy's used its Twitter account, which has more than 1.8 million followers, to poke fun at the Golden Arches for still using frozen beef in all of its other burgers.

Wendy's tweet

Penegor said that Wendy's was able to gain about 0.6 percent in consumer traffic share during the first quarter this year, meaning more folks were walking through its doors.

Same-store sales in North America were also on the rise last quarter, up 1.6 percent. This marks the 17th consecutive quarter of positive same-store sales for the company. Analysts had expected same-store sales to be up about 1.1 percent.

The company posted earnings of 9 cents per share on $285.8 million in revenue. Wall Street had anticipated earnings of 8 cents per share on $282.6 million, according to Thomson Reuters estimates.

Shares of the Wendy's were up as much as 6 percent, trading just off the company's 52-week high of $16.12 and shy of its all-time high of $17.72, which it hit in 2007.

(source: FactSet)