Wendy’s Cuts its 2019 Forecast as it Gears Up for Nationwide Breakfast Launch

On Monday fast food giant Wendy’s said it plans to ramp up spending for the company’s nationwide launch of breakfast in 2020 and that it is cutting its 2019 outlook.

Wendy’s is planning on investing roughly $20 million into supporting the preparation for this launch in its U.S. stores and will be hurting 20,000 employees.

For 2019, the Ohio-based company is expecting adjusted earnings per share to drop by 3.5% to 6.5%. This is compared to the previous expectation of a growth of 3.5% to 7%. The company will provide an update to its 2020 goals at its investor day Oct. 11.

Initially shares of Wendy’s saw a drop of almost 9% on the news but regained some of the losses.
Wendy’s currently offers breakfast in more than 300 of its restaurants and plans to offer items like the Breakfast Baconator, honey butter chicken biscuit, and the Frosty-ccino.

The nationwide launch “provides incredible growth opportunities,” said Todd Penegor, the company’s president and CEO, in a statement.

“Launching breakfast in our U.S. restaurants nationwide provides incredible growth opportunities,” said Penegor.

“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,” he added.

It was last month that Wendy’s reported Q2 financial results that revealed net income of $32.4 million, or 14 cents a share. This is up from $29.9 million, or 12 cents a year in the year before.
Shares are still up about 40% in 2019.

Disclaimer: We have no position in Wendys Co. (NASDAQ: WEN) and have not been compensated for this article.