Wendy’s (NYSE:WEN) shares plummeted on Tuesday, a day after the restaurant chain cut its 2019 outlook as it plans to ramp up spending for a nationwide launch of breakfast next year.
So, as the chain is anteing up to take part in breakfast competition, Wendy’s plans to invest about $20 million to support its U.S. stores in preparation for the launch.
In August, the company said it expected adjusted earnings per share growth of 3.5% to 7%, but it now expects adjusted earnings per share to decline by 3.5% to 6.5% in 2019. Wendy’s will provide an update to its 2020 goals at its investor day Oct. 11.
The Dublin, Ohio-based fast food company currently offers breakfast in more than 300 of its restaurants. At the end of 2018, it had 5,810 stores in the United States, according to regulatory filings. To support its breakfast expansion, Wendy’s and its franchisees plan to hire an additional 20,000 employees.
Wendy’s plans to offer items like the Breakfast Baconator and the Frosty-ccino to entice customers to try its take on breakfast.
In August, the burger chain reported second quarter net income of $32.4 million, or 14 cents per share, up from $29.9 million, or 12 cents per share, a year earlier. In North America, restaurants open at least 15 months saw sales grow by 1.4% during the quarter.
Wendy’s shares, which have a market value of $5.1 billion, is up 40% this year, as of Monday’s close. Those shares opened Tuesday down $1.92, or 8.8%, to $20.03
