Wendy’s news for Tuesday includes WEN stock falling hard following the announcement of breakfast plans.
Wendy’s (NASDAQ:WEN) notes that it will be introducing a few new menu items to customers across the U.S. This includes its Breakfast Baconator, Frosty-ccino, and Honey Butter Chicken Biscuit. The goal is to have breakfast available at all of its U.S. stores in 2020.
Here’s the thing about this Wendy’s news, it isn’t all good for the company. This includes plans to hire an additional 20,000 employees to handle breakfast. It also says that it will be investing $20 million into bringing breakfast to all of its U.S. stores.
That one-time $20 million investment is likely what it hitting WEN stock the hardest today. Due to it, Wendy’s is updating its outlook for 2019. That includes changing its earnings per share guidance to be down 3.5% to 6.5% for the year.
The update to Wendy’s outlook for 2019 also now has it expecting adjusted EBITDA to come in flat to down 2.0 percent. Cash flows from operations are expected to be between $290 million and $305 million. Finally, the fast food chain is expecting free cash flow to be down 2.5% to 7.0%. This has it ranging from $215 million to $225 million.
The recent Wendy’s news release doesn’t contain any updates to its long-term guidance. However, WEN says it will be announcing these changes at its Investor Day.
WEN stock was down 10% as of Tuesday afternoon, but is up 40% since the start of the year.
As of this writing, William White did not hold a position in any of the aforementioned securities.