DUBLIN, Ohio (AP) — Wendy’s first-quarter results topped Wall Street’s expectations as a key sales metric improved. The fast-food chain boosted its full-year earnings guidance.
But its shares fell more than 7 percent in morning trading Wednesday after initially edging higher.
For the period ended April 3, the hamburger chain earned $25.4 million, or 9 cents per share. A year ago the Dublin, Ohio-based company earned $27.5 million, or 7 cents per share.
Earnings, adjusted for one-time costs, were 11 cents per share. That’s better than the 6 cents per share that analysts surveyed by Zacks Investment Research forecast.
Revenue declined to $378.8 million from $451.8 million, but still beat the $350.8 million that analysts polled by Zacks expected. The company said the revenue decline reflected that the it owned 375 fewer restaurants at the end of the latest quarter than at the start of the year-ago quarter.
Sales at restaurants in North America open at least a year climbed 3.6 percent. This figure is a key indicator of a restaurant operator’s health because it excludes results from locations recently opened or closed.
Wendy’s Co. said that it now foresees full-year earnings in a range of 38 cents to 40 cents per share. Its prior outlook was for 35 cents to 37 cents per share.
The company also announced that preliminary findings from an investigation into unusual credit card activity at some of its restaurants have led the chain to believe that malware impacted fewer than 300 of about 5,500 franchised locations in North America, starting in the fall of 2015.
Wendy’s says it’s disabled and gotten rid of the malware in affected restaurants. The company added that about 50 franchise restaurants are suspected of experiencing, or have been found to have, unrelated cybersecurity issues. Wendy’s and its impacted franchisees are working to verify and resolve the issues, the company said.
Wendy’s shares fell 74 cents, or 6.6 percent, to $10.44 in morning trading. Its shares are down almost 6 percent over the past 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on WEN at http://www.zacks.com/ap/WEN
Keywords: Wendy’s, Earnings Report