Wendy's Shares Fall for a Second Straight Day After Announcing Breakfast Launch
Christopher Vargas, Zacks
via Yahoo Finance - September 10, 2019
Shares of Wendy’s WEN were down as much as 11% in intraday trading today, and closed down over 2% on Monday after the company announced they are ramping up spending on their breakfast line for a nationwide release sometime in 2020. The burger chain is planning on spending $20 million to add more menu items and longer hours at its 5,813 domestic restaurants. Wendy’s said it and its franchises will hire 20,000 workers to help roll out the expanded offerings.
As a result of the company entering the breakfast wars with the likes of McDonald’s MCD, Burger King, and Taco Bell YUM, they lowered their financial guidance for fiscal 2019. The company announced that it now expects adjusted earnings per share to decline by 3.5% to 6.5% from its previous forecast of growth between 3.5% to 7.0%. The lowered guidance sent the company’s shares falling for the past two days, bringing its year-to-date return down to 24.8%.
Breakfast items have become an increasingly competitive part of the day for major fast food companies. McDonald’s has pointed towards the breakfast competition as an area of concern. The company reported that guest growth in breakfast has begun to recover, but the progress has remained slow. The breakfast market for fast food chains has become saturated, making it harder to gain a large market share in the industry.
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