(Bloomberg) -- Wendy’s Co. trimmed its annual sales guidance following a retreat from US customers in the second quarter, the latest sign that inflation-battered diners are cutting out burger outings.
Overall sales should increase between 3% and 5% this year, the company said Thursday, down from an earlier forecast of as much as 6%. In the second quarter, sales at locations open at least 15 months grew slower than analysts expected. Revenue also fell short.
Wendy’s shares fell 1% at 9:48 a.m. in New York trading. In a note to clients before the earnings, Guggenheim Securities analyst Gregory Francfort said investors were probably already anticipating a guidance cut.
The burger chain’s growth has moderated in recent quarters, weighed down in part by a demand slump that’s also hit McDonald’s Corp. and Starbucks Corp. Wendy’s has focused on building out its breakfast business as it looks to boost profitability for franchisees and expand sales through its app. New menu items include a new Triple Berry Frosty milkshake and “saucy” chicken nuggets.
Prices in the US rose about 4% in the second quarter, but traffic declined about 2%, Chief Financial Officer Gunther Plosch said in a call with analysts. Low-income diners are visiting less, he said, mirroring trends at rivals such as McDonald’s. Wealthier guests are coming more often, likely as they trade down from pricier dining options.
The Frosty seller continues to foresee earnings per share of at least $0.98. Second-quarter results for that metric were roughly in line with market expectations.
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