Wendy’s Sees Up to $200 Million in EBITDA From Breakfast Changes

Wendy’s estimates that allowing restaurants to opt out of breakfast could add as much as $200 million in restaurant-level EBITDA across company-operated and franchised locations, as the chain works to improve U.S. sales and profitability.

A fairly large portion of restaurants may opt out of breakfast. The company did not quantify how many restaurants might make that choice or disclose an estimated impact per restaurant.

U.S. same-restaurant sales declined 5.7% year over year in the third quarter. The measure improved 130 basis points sequentially.

The company ended the quarter with about $413 million in cash and net debt leverage of 5.2 times. For the near term, Wendy’s expects leverage to stay high; it cites its unused revolving credit line and free cash flow as funding capacity.