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Wendy’s meal deals and humorous offerings do not increase visits
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Wendy’s meal deals and humorous offerings do not increase visits

Wendy’s Co. cut its full-year sales outlook after quarter-over-quarter same-store sales growth was less than analysts expected, with value meals and a tongue-in-cheek promotion generating less interest than expected.

Total revenue should rise about 3% this year, down from its previous forecast of as much as 5%, the company said in a statement Thursday. Same-store sales, a benchmark for tracking stores open at least 15 months, rose 0.2% in the third quarter. Analysts called for much faster growth.

Wendy’s has tried to boost growth by boosting its breakfast and late-night businesses, including promotions and more advertising, while gaining more users for its digital app. The company has also launched humorous marketing campaigns, including the McBroken website, which shows where McDonald’s Corp. ice cream machines are located. not work and directs customers to the nearest Wendy’s.

Customer numbers fell in the quarter, Wendy’s said, highlighting that the burger chain must do more to entice diners saddled with high inflation. Earnings per share remained approximately in line, while revenue exceeded expectations.

Wendy’s said it expects better sales trends between the third and fourth quarters. Initiatives driving sales include a $1 drink promotion and a limited-time offer around SpongeBob’s 25th anniversary, featuring a Krabby Patty burger and Pineapple Under the Sea Frosty.

The SpongeBob promotion “is generating a strong response that is driving significant revenue growth,” CEO Kirk Tanner said in a call with analysts.

Wendy’s shares were down 4.5% at 9:39 a.m. in New York. The company’s shares were up 4.3% this year through Wednesday’s close, compared with a 22% gain for the S&P 500 Index.

Wall Street is looking for “tangible evidence” that the company can improve sales and outperform competitors, Jim Salera of Stephens Inc. wrote. in a note to customers after the earnings announcement.

“We believe investors are in a wait-and-see mode,” Salera wrote.