Fast food restaurant chain, Wendy’s seen in Tokyo, Japan.
Budrul Chukrut | SOPA Images | LightRocket via Getty Images
Wendy’s shares jumped Wednesday after the company reported its U.S. sales, which had been hurt by customers staying home during the coronavirus pandemic, are rebounding.
After plunging in March and the first two weeks of April, the company’s U.S. same-stores sales fell only 2.1% last week.
Shares of the company rose 6% in premarket trading.
Here’s what the company reported for the quarter ended March 29:
- Earnings per share: 9 cents, adjusted
- Revenue: $405 million
The burger chain reported fiscal first-quarter net income of $14.44 million, or 6 cents per share, down from $31.89 million, or 14 cents per share, a year earlier.
Excluding items, Wendy’s earned 9 cents per share.
Net sales fell 1% to $405 million.
Wall Street anticipated earnings per share of 10 cents on revenue of $414.4 million, based on a survey of analysts by Refinitiv. However, it’s difficult to compare reported earnings to analyst estimates as the coronavirus pandemic continues makes earnings impact difficult to assess.
Wendy’s U.S. same-store sales were flat for the quarter, after March’s decline of 7.7% erased earlier months’ same-store sales growth. U.S. same-store sales hit their low point in the week ended April 5, plunging 25.8%. But in the latter half of the month, same-store sales declines in Wendy’s home market have shrunk.
Even as more consumers eat breakfast at home, Wendy’s breakfast, which launched nationwide in early March, accounted for 8% of sales in April.
Its international business has also showed signs of improvement, although 25% of those locations are closed, as of May 3. International same-store sales plummeted 39.1% in the week ended April 12. Two weeks later, same-store sales had fallen 23.6%.
Wendy’s locations that have been closed more than a week are not included in its same-store sales results.
To preserve cash, the company cut its quarterly dividend from 12 cents to 5 cents and has identified $30 million in potential cost savings from its general and administrative expenses and capital plan. Wendy’s said it has $365 million in cash on hand, as of May 3.