The Wendy’s Co. will close additional restaurants, accelerating planned closures from 2025 to this year, executives said Thursday.

The Dublin, Ohio-based burger chain, reporting earnings for the third quarter ended September 29, said it had “made the strategic decision to close additional restaurants this year that are outdated and located in underperforming trade areas. These restaurants have AUVs of approximately $1.1 million and operating margins well below the system average.”

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The company wants to replace these with restaurants with an average unit volume of $2 million or more.

Kirk Tanner, CEO and president of Wendy’s, said, “We designed this initiative to ensure that many of these units will be replaced by new restaurants in better locations with significantly improved sales and profitability.”

Tanner added that executives expected total closures in 2024, including additional closures in the fourth quarter, would be offset by new restaurant openings this year, “leaving our net unit growth approximately flat compared to the prior year.”

Gunther Plosch, Wendy’s chief financial officer, said the “additional closures total approximately 140 additional units.”

Executives told analysts that the planned closures were geographically dispersed.

“If you think about strengthening our system _— you look at a brand that is 55 years old and some of those restaurants are just outdated,” Tanner said.

Wendy’s is leaning on its partnership with Coca-Cola Freestyle for the $1 promotional drink available now, Tanner added.

“It certainly delivers the portfolio that Coca-Cola has, and it delivers it in both full sugar and 0-sugar, giving customers real choice,” Tanner said. “That’s a benefit at Wendy’s, and we wanted to celebrate that and remind people that’s when the $1 promotion happened.”

Wendy’s plans to its SpongeBob SquarePants promotion in the third quarter with a Salted Caramel Frosty and a premium mushroom burger in the fourth quarter, Tanner said.

For the third quarter ended September 29, Wendy’s net income was $50.2 million, or 25 cents per share, compared to $58 million, or 28 cents per share, in the year-ago period. Revenue was $566.7 million, compared to $550.6 million a year ago.

Wendy’s same-store sales growth in the third quarter was 2.8% globally, with increases of 2.2% in the United States and 7.8% internationally.

As of September 29, Wendy’s had 6,010 restaurants in the United States and 1,156 internationally, for a total of 7,166.

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