Wendy's burger bonanza

The fast-food chain's new pretzel bun has the company on a roll.

By Stock Traders Daily Aug 12, 2013 3:11PM

 copyright BananaStock, JupiterimagesBy Neal Rau

 

Not all burgers are created equal. Americans love their fast food but they are growing tired of the same old thing. The niche burger-chains like In-N-Out Burger and Five Guys Burgers are becoming much more popular among Americans. These burger chains offer a smaller menu but better quality food. 


Most Americans are looking for more than a dollar menu; they are looking for higher quality, variety and value. The only big burger-chain that seems to realize this trend is Wendy's (WEN). They just introduced a new burger that has created the biggest buzz in fast food in years, the Pretzel Bacon Cheeseburger. It has been so successful that since the launch of their new Pretzel Bacon Cheeseburger on July 1, Wendy's has seen its stock price increase over 42%!

 

Most people probably do not know that Wendy's passed Burger King (BKW) last year, becoming number two on the largest burger-chain list behind McDonald's (MCD). Burger King's creepy King mascot ads a few years ago probably helped Wendy's cause. This year the chain has built on that momentum by cleaning up its stores and offering more premium burgers and sandwiches. Now customers can get a burger like the Pretzel Bacon Cheeseburger, which rivals any Five Guys burger, or choose from a variety of different menu items. WEN is upgrading many stores with bistro-like features, hoping to be associated more with the fast casual, higher quality restaurants like Chipotle Mexican Grill (CMG) and Panera Bread (PNRA).  Both PNRA and CMG have seen big gains this year. PNRA just bounced back after testing long-term support, the stock recently fell on disappointing Q2 earnings.

 

WEN shares are trading at a 52-week high and at their highest levels since 2008. Wendy's says it earned $12.2 million, or 3 cents per share. That compares with a loss of $5.5 million, or 1 cent per share, a year ago. For the year, Wendy's said it expects the sales figure to grow between 2% and 3%, given its expectation for stronger sales in the second half of the year. The company also increased the quarterly dividend by 25% to 5 cents, a 2.8% yield. Stock Traders Daily has WEN strong near-term, but the stock is in play because it is testing long-term resistance; if resistance holds the stock could reverse all the way to longer term support. 

 

No doubt, the new pretzel bun has WEN on a roll. The timing of remodeling stores and a popular new product is what is driving the sales for WEN. They are offering customers the best of both worlds, the premium burger choice of the niche burger chains and the value only a big burger-chain can offer. 


Customers are willing to spend more to get something different and the pretzel bun is certainly different. In the end, just a bun can make a difference. Look for WEN to keep the new Pretzel Bacon Cheeseburger as a permanent item on the menu; it was originally intended to only be a limited time product. Who knows, maybe they will add the pretzel bun to other sandwiches on the menu. It is important for WEN to strike while the iron is hot and right now, the pretzel bun is hot. There is nothing on the market quite like it, and with this kind of buzz on one product, you can be sure that others are sure to follow.  After a big move in the stock, keep an eye on WEN long-term resistance.

102Comments
Aug 12, 2013 4:27PM
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Last night on my way to Dairy Queen, Wendy's was closer and I thought why not. I'm not a fan of drive through hamburgers , like Sonic or McDonald's, but was really hungry for a cheeseburger. I tried a pretzel/bacon cheeseburger and it was DELICIOUS! Will definitely go back for another one.

Aug 12, 2013 4:58PM
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The pretzel burger is pretty good, but I like it better with just mayo rather than the honey mustard sauce that comes on it.  However, the article would make more sense if the picture was of the pretzel burger, or any Wendy's burger, for that matter.  No Wendy's burger has sesame seeds on the bun.  Looks more like a Burger King sandwich.
Aug 12, 2013 4:54PM
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This is about the fourth similar article i have read on here in the past month about Wendy's. I wonder if somebody is getting their bun buttered under the table????
Aug 12, 2013 4:20PM
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Nothing better than a BBQ burger from the grill at home. fast food is a fast way to the grave.


Aug 12, 2013 4:48PM
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All hail Wendy's!  Put that POS Mcdonalds out of its misery, and burger king while you're at it.  I'm a cheeseburger fanatic, and I eat an average of 1 or 2 a week.  Wendy's burgers are by far the best anywhere, even beating most sitdown restaurants.
Aug 12, 2013 6:15PM
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Five guys was the most disappointing burger I ever had and for the price certainly not a good value. I usually go to Carl's or Wendy's as they both provide the most value no matter which burger you choose.

Aug 12, 2013 4:42PM
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Loving that new pretzel burger.  The sauce is really tasty!
Aug 12, 2013 11:56PM
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Actually, it's all due to the commercials with Morgan Smith Goodwin.  She LOOKS like Wendy.  They stopped using the real Wendy as, lets face it, she was larger in size and selling burgers put them in a negative frame of mind for many people (I'll look like that if I eat the burger).  But Morgan, fresh faced, thin, energetic .. bright red hair ... eating a fresh pretzel burger.  The consumers are loving it!  There are web sites dedicated to her, fan clubs .. Wendy's hit their Flo with her.  Sure new products are keeping people's interest.  But the spokesperson is getting their attention to begin with.   
Aug 12, 2013 6:20PM
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How about a pretzel-pretzel?  It's a pretzel wrapped in a pretzel!!

 

This reminds me of Jim Gaffigan's funny jokes about Hot-Pockets.  Eventually, it comes full circle and people are simply being duped into eating junk under the premise that it is "new and improved!"

 

But kudos to Wendy's, they do have decent food compared to McDonalds.  This is more a comentary on US consumers who will frenzy over a Doritos Taco or a Pretzel bun burger.  It's the same consumer who is easily bought with the most minimal of marketing tricks. 

 

Aug 13, 2013 10:35AM
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Most of this story is BS. Americans are not switching to the higher end burgers. Maybe a few have but in large numbers no way. Do some of your own non-scientific research. Check out the parking lots and drive thru's at your local McDonalds and Wendy's as compared to Five Guys if you have one. I drive by a Five Guys everyday along with a couple McD's and a Burger King and a Wendy's. McD's is always and I mean always packed. Wendy's is also usually very busy. Burger King is busy at meal times. Five Guys is at best 4th out of 4 as far as traffic in their lot. Of course at the prices they charge it don't take many to make a profit. I think the writer is full of mud! The dollar menu is what drives the traffic to the front door. Wendy's and McD's would like to sell more of the $2.99 burgers sure. But, that $1 Sweet tea and McDouble is pulling those Fords and Chevys on to their lots.

Aug 12, 2013 4:56PM
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I usually go to Burger King when I have fast food, but maybe I will try Wendy's new burger.  I recently had a great burger at a place called "Two Guys" in Lumberton, North Carolina, just off exit 20 on Route 95.  I highly recommend that place if anyone is in the area.

This place is not a fast food joint.  It is a regular restaurant with good food and a bar.

Aug 12, 2013 5:46PM
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ive been eating the pretzel burger since wendy introduced it,its my fav burger there
Aug 13, 2013 11:45AM
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I'm with Varacefan24, the nearest Wendy's to me never seems to get much traffic but the Carl's Jr (and my favorite) near me is ALWAYS busy. Now take Arby's (PLEASE), they emptied my bank account for two sandwiches and chips.
Aug 13, 2013 11:32AM
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I tried the Pretzel Bacon Cheeseburger and it's actully pretty good for the price compared to the Five Guys burger.  Not a bad deal at all.
Aug 13, 2013 11:24AM
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You know for some reason i prefer to eat the Nuggets at Wendys then any other place... i feel like there chicken is top quality ..  When it comes to other its just not the same. Wendys is an old fashion style burger joint.. and i would recommend it to anyone.
Aug 13, 2013 11:46AM
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The pretzel-bacon-cheeseburger is fantastic!  Best of all the fast-food restaurants.
Aug 13, 2013 1:03AM
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I just went to Wendys and had a Pretzel Burger .The bun was dry and to thick.  I won't have another one, would rather have a Baconator.
Aug 13, 2013 11:36AM
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This sounds DELICIOUS!!  And the writer of this article is correct, the BK "King" ads were creepy.
Aug 13, 2013 12:19AM
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Last year they did a revamp of their basic1/4 burgers, making the patty thicker, adjusting the toppings and the bun, seasoning of the burger meat. They come out with short runs of various burgers, chicken sandwiches. You always can get it 'your way' and they don't nuke their burgers vs. BK. They have ads that work well and sell in a 'family friendly' way. While they offer 'value menu' items, they did a revamp of products and pricing. It is no wonder they are on the up.
Aug 12, 2013 5:31PM
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Pretzel burger?  Sonic already trying pretzel buns on their dogs, Hot pockets has pretzel shell for many months.  This is all old news.  If you want to try something GREAT find a Fuddruckers and try their Samual Adams BBQ burger.  It is mind blowing how good it is.  
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