Wendy’s (NASDAQ:WEN) has lowered its full-year global sales forecast as the burger chain faces rising input costs and declining customer traffic in the United States.
To attract budget-conscious diners during uncertain economic times, the company has been increasing its promotional offers.
However, Wendy’s, which is also undergoing a leadership transition following the sudden resignation of CEO Kirk Tanner last month, reported a drop in sales at its U.S. outlets. Margins in this segment have been pressured by higher commodity prices and labor costs.
“In the U.S., we have work to do to improve the overall performance of the business,” said Interim CEO Ken Cook in a statement.
In this context, Wendy’s has cut its annual global systemwide sales growth forecast to a decline of 3% to 5%, down from the previous expectation of flat to a 2% decrease.
Adjusted EBITDA is now projected between $505 million and $525 million, below the earlier range of $530 million to $545 million.
Still, Wendy’s delivered stronger-than-expected adjusted core income of $146.6 million for the second quarter, a 2.5% increase from last year, aided by reduced advertising expenses and higher net franchise fees. Revenue fell 1.7% year-over-year to $560.9 million but remained above estimates.
Wendy’s shares were trading near unchanged in premarket activity on Friday.
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