Wendy's: Downgrade To Sell On Weak Earnings In The Near-Term
Summary
- I am downgrading Wendy’s to a sell due to worsening consumer headwinds and no sign of near-term recovery in traffic or sales.
- March traffic data was especially weak among core lower-income customers, and management’s 2Q guidance suggests continued negative same-restaurant sales growth.
- The breakfast strategy failed to gain traction, removing a key growth lever, while operating deleverage is pressuring profitability as costs rise.
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