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Wendy’s Meal Deals and Humorous Offers Fail to Increase Visits
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Wendy’s Meal Deals and Humorous Offers Fail to Increase Visits

Wendy’s Co. cut its full-year sales outlook after quarterly same-store sales rose less than analysts expected, with value meals and a tongue-in-cheek promotion drawing less interest than expected .

Overall sales are expected to rise about 3% this year, with the low end of its prior forecast of up to 5%, the company said in a statement Thursday. Same-store sales, a metric that tracks stores open at least 15 months, rose 0.2% in the third quarter. Analysts were calling for much faster growth.

Wendy’s has sought to fuel its growth by strengthening its breakfast and late-night businesses, including through deals and increased advertising, while seeking to recruit more users to its digital app. The company has also launched humorous marketing campaigns, including on the McBroken website, which displays where McDonald’s Corp. ice cream machines are located. are down and redirects customers to the nearest Wendy’s.

Customer numbers declined during the quarter, Wendy’s said, noting that the burger chain needs to do more to attract diners struggling with high inflation. Earnings per share were roughly in line, while revenue exceeded expectations.

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

The SpongeBob promotion “generates a powerful response that drives significant sales growth,” CEO Kirk Tanner said on a call with analysts.

Wendy’s shares fell 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% rise for the S&P 500 index.

Wall Street is looking for “hard evidence” that the company can improve sales and outperform its peers, Stephens Inc.’s Jim Salera wrote in a note to clients after the earnings release.

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