Salem Radio Network News Thursday, October 6, 2022

Business

Wendy’s U.S. sales disappoint as inflation crimps consumer spending

(Reuters) – Wendy’s Co missed Wall Street estimates for quarterly U.S. same-store sales growth on Wednesday, as Americans reined in their spending on burgers and fries in the face of decades-high inflation.

Lower-income households are avoiding discretionary purchases as prices of everyday essentials surge, which has affected the hamburger chain that was already grappling with competition from McDonald’s Corp, KFC and Burger King.

To attract customers snubbing fast food for cheaper home-cooked meal, many restaurants including bellwether McDonald’s are now considering introducing lower-priced foods.

Wendy’s U.S. same-store sales rose 2.3% in the second quarter ended July 3, compared with estimates for a 2.8% increase, sending its shares down 2.3% in premarket trading.

Wendy’s revenue rose 9% to $537.8 million, but missed Wall Street expectations of nearly $540 million even as same-store sales at its restaurants outside the United States topped estimates.

The Dublin, Ohio-based restaurant chain, helped by a decline in general and administrative expenses and share repurchases, expects 2022 adjusted earnings per share between 84 cents and 88 cents, compared with its previous range of 82 cents to 86 cents.

Analysts on average expect 83 cents per share.

In the reported quarter, adjusted earnings were 24 cents per share, beating estimates of 22 cents.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli)

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