Wendy’s quarterly earnings were lower than expected when the Dublin, Ohio-based fast-food chain announced them on Wednesday (Aug. 10), but the company blamed the downturn in sales to the fact that people simply aren’t eating out as much because the low cost of groceries now makes it cheaper to eat at home.
“It’s gotten a lot more cheap to get beef at your local butcher and go home and grill it,” Wendy’s Chief Executive Todd Penegor said during an earnings call to announce the company’s disappointing numbers.
Wendy’s North American sales for the second quarter (which ended July 3) rose just 0.4 percent, while most analysts had pegged growth at about 1.9 percent.
Penegor also blamed the downturn on the upcoming election.
“When a consumer is a little uncertain about their future and what this election cycle means for them, they’re not as apt to spend as freely as they were even a couple of quarters ago,” Penegor said. “There is tightening in disposable income, especially on the low end.”
In the second quarter, Wendy’s earned $26.5 million, or $0.10 per share, but revenue fell to $382.7 million from $489.5 million. Wendy’s blamed the revenue dip on the fact that it has been selling restaurants back to franchises.
Wendy’s stock fell 2.75 percent to close at $9.91 a share on Wednesday.
According to AP, Wendy’s is just the latest fast-food chain to post disappointing earnings this quarter. McDonald’s, Burger King, Dunkin’ Donuts and Starbucks all posted disappointed earnings in the quarter, with many of the brands also blaming the uncertainty brought about by the current election climate.
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