Will Wendy’s Choke on Its New Breakfast Expansion?
Wendy’s is moving back into breakfast with its most recent business update. The burger chain announced that it plans to launch its breakfast menu, currently available in more than 300 restaurants, across the U.S. system in 2020.
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Wendy’s Co. (NASDAQ: WEN | WEN Price Prediction) is moving back into breakfast with its most recent business update. The burger chain announced that it plans to launch its breakfast menu, currently available in more than 300 restaurants, across the U.S. system in 2020.
Breakfast has been a popular theme among fast-food chains over the past few years. McDonald’s saw monumental success when it implemented all-day breakfast across its chain. Perhaps this could be the next step for Wendy’s?
As a result of its intention to expand breakfast across its U.S. system in 2020, Wendy’s is updating its 2019 outlook as it expects to make one-time upfront investments during 2019 of approximately $20 million to support the U.S. system in preparation of its national launch.
Note that all other elements of Wendy’s 2019 outlook remain unchanged. Additionally, the burger chain is removing its 2020 goals as it intends to update these goals and provide additional long-term guidance at its Investor Day on October 11, 2019.
In terms of 2019 guidance, the company now expects to see per-share earnings down in the range of 3.5% to 6.5%, with cash flows from operations between $290 million and $305 million. While these numbers were updated, Wendy’s still expects to see global systemwide sales growth 3.0% to 4.0%. Consensus estimates are calling for earnings of $0.63 per share and $1.7 billion in revenue for the 2019 full year.
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Todd Penegor, president and CEO of Wendy’s, commented:
Launching breakfast in our U.S. restaurants nationwide provides incredible growth opportunities. We are well-positioned to pursue it. We believe we have the right team and structure in place, and we put Wendy’s fan favorites on our breakfast menu to set us apart from the competition.
Shares of Wendy’s traded down about 8% early Tuesday to $20.17, in a 52-week range of $14.96 to $22.84. The consensus price target is $21.42.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
