Investors react to Wendy’s earnings
Wendy’s (WEN) reported its earnings on August 8 before the market opened. Shares began trading at $8.06, which was up 10% from previous day’s closing of $7.98. The day’s high and low was $8.20 and $7.95, respectively.
Share volume was ~14.4 million shares, compared to the 50-day average daily volume of ~4.7 million, according to NASDAQ. Wendy’s closed 2.2%, up at $8.16.
Wall Street analyst consensus estimated an adjusted earnings per share (or EPS) of $0.09. The company met this expectation, which was priced into the share, with no positive or negative surprise. The company reported a net income of $29 million, which was up 137% year-over-year from $12 million. Same-store sales grew 3.9% for company-owned restaurants and 3.2% for franchise restaurants, giving enough reason for investors to stay invested in the stock. The company, however, reported a $24 million loss in earning before interest, tax, depreciation, and amortization (or EBITDA) for the quarter due to its system optimization initiative.
Wendy’s competes with McDonald’s (MCD), and Yum! Brands (YUM) along with other players in the fast food or quick service restaurant format. McDonald’s by far has the largest market share in the U.S. McDonald’s closed 1.3% down on missed earnings. Yum! Brands also traded lower after earnings closing 7% below the previous day’s close.
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