(Reuters) -Wendy’s Co missed Wall Street estimates for quarterly results on Wednesday, as rising inflation kept customers from splurging on the company’s bacon-loaded sandwiches and drinks.
The Dublin, Ohio-based fast-food chain said it had fewer customers place orders in the quarter, sending its shares down over 3% in premarket trading.
Analysts have said Wendy’s breakfast menu – known for items including the Baconator burger and Frosty-ccino coffees – could face pressure from consumers turning to cheaper meals as higher prices of everything from gas to toothpaste hit Americans’ pockets.
BMO analyst Andrew Strelzik recently noted McDonald’s, which was seeing some its customers trade down to cheaper or fewer menu items, tends to be more resilient in a softer economy.
Wendy’s has also been facing rising competition from rival chains McDonald and KFC-parent Yum Brands launching new menu items.
Profit margins also fell for Wendy’s due to higher costs toward labor and commodities such as beef, chicken, coffee and edible oils.
U.S. same-store sales at the company rose 1.1% in the first quarter ended April 3, compared with analysts’ average estimate for a 2.28% increase, according to Refinitiv IBES.
Its company-operated restaurant margin fell to 11.6% from 17% a year earlier.
Total revenue rose 6.2% to $488.6 million, also missing estimates of $496.9 million.
Excluding items, Wendy’s earned 17 cents per share, missing estimates by 1 cent.
(Reporting by Deborah Sophia in Bengaluru; Editing by Shinjini Ganguli)
