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Wendy's Falls After Revising 2019 Guidance

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Wendy's Falls After Revising 2019 Guidance

Wendys Co (NASDAQ: WEN) announced Monday afternoon it plans on introducing breakfast options at all restaurants and this will negatively impact financial results for 2019.

What Happened

Wendy's said it wants to expand the availability of breakfast dining from more than 300 restaurants today to all locations in the U.S. in 2020. The company expects to make a one-time investment of around $20 million this year to support the nation-wide launch.

Wendy's guided its EPS growth in August to be 3.5% to 7% and management narrowed the range to 3.5% to 6.5%. Other financial metrics remain unchanged, including global systemwide sales growth of 3% to 4% and capital expenditures of around $75 to $80 million.

Why It's Important

Breakfast represents an "incredible growth" opportunity for the fast food chain, said Wendy's President and CEO Todd Penegor. The company is "well-positioned" to gain share in the breakfast space with its "Wendy's fan favorites" items on the menu.

As part of Wendys' expansion into breakfast the company will be looking to hire around 20,000 employees across the country. The company will update its 2020 outlook in early October during its investor day conference.

Wendy's shares fell 8.8% Tuesday morning.

Benzinga's Take

Wendy's might be late to the game and up against serious competition as larger rival McDonald's Corp (NYSE: MCD) offers all-day breakfast options.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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Posted-In: breakfast Fast Food Todd PenegorNews Guidance Restaurants General Best of Benzinga

 

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