Financial Performance

Storms Dent Wendy’s Same-Store Sales in Q3

The fast-food chain's stock falls 3% amid concerns it is losing ground to its rivals in the burger wars.
Matthew HellerNovember 8, 2017
Storms Dent Wendy’s Same-Store Sales in Q3

The recent hurricanes may have caused Wendy’s to miss quarterly same-store sales estimates as the burger chain also faced increasing competition from rivals McDonald’s and Burger King.

Wendy’s reported Wednesday that same-restaurant sales in North America rose 2.% in the third quarter, missing analysts’ expectations of a 2.4% increase. Comparable sales were up 3.2% in the second quarter.

The company, whose stores are heavily concentrated in Florida and Texas, said the hurricanes negatively impacted North America comp sales by approximately 30 to 40 basis-points in the third quarter.

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Wendy’s did keep its growth streak intact — same-store sales have now increased for 19 straight quarters — but its other results also missed estimates. It reported adjusted earnings of 9 cents per share and revenue of $308 million, compared to forecasts of earnings of 12 cents per share and revenue of $308.6 million.

In trading Wednesday, Wendy’s shares fell 3.2% to $14.27 amid concerns that it may be losing ground to its main rivals in the burger wars. For the full year, it trimmed the higher end of its North American same-store sales forecast to 2% to 2.5% from its previous range of 2% to 3%.

As CNN reports, both McDonald’s and Burger King “have been busy launching new food items on the menu and deeper discount meal options. Mickey D’s has already found success with its McPick 2 menu — that offers 2 items for $5 — and it will soon launch $2 and $3 value menus too.”

Wendy’s own value options include a 50-cent Frosty dessert promotion as well as a 4 for $5 meal that offers a Giant Junior Bacon Cheeseburger, fries, four chicken nuggets and a small drink.

The chain also has been experiencing year-over-year declines in revenues over the past few quarters due to sales of company-operated restaurants to franchisees.

“Our relentless focus on executing every element of The Wendy’s Way by providing food our customers love, friendly service, value, and an inviting atmosphere will continue to drive growth in the future,” CEO Todd Penegor said in a news release.