Wendy’s Co (WEN.O) raised its annual forecast for earnings on Wednesday, betting that its revamped, bacon-loaded breakfast menu would bring in more customers as restaurants reopen for dining.
Shares rose 2.3% to $23.30 as the burger chain also beat Wall Street estimates for quarterly same-store sales in the United States.
Wendy’s is getting ready for customers to return to its restaurants with new launches like the fried chicken sandwich, to tackle that of its competition, iced beverages and its popular breakfast offerings.
The company had invested millions of dollars in its breakfast menu over the past year to hire staff and market its morning offerings.
“We got to get this great food in consumers’ mouths,” Chief Executive Officer Todd Penegor told analysts.
Penegor expects more customers to make Wendy’s a part of their breakfast routine, as they get back to eating breakfast in restaurants rather than making it at home.
“Breakfast is very habitual… we got to continue to be able to build the habit to use the brand for breakfast rather than just dinner,” Penegor added.
The company expects sales from its breakfast category to grow 30% in 2021.
For the year, Wendy’s expects adjusted earnings between 72 cents and 74 cents per share, up from its prior projection of 67 cents to 69 cents.
It hiked its quarterly dividend by 11% to 10 cents per share and increased its share repurchase program by $50 million.
“Wendy’s is participating in the industry’s sales euphoria,” said Andrew Charles, an analyst at Cowen, referring to fast-food chains returning to growth boosted by stimulus measures and vaccine distributions.
Wendy’s U.S. same-store sales rose 13.5% in the quarter, beating estimates of 9.84%, according to IBES data from Refinitiv. On an adjusted basis, it earned 20 cents per share, 5 cents more than estimates.