Fast food giant Wendys Co (NASDAQ:WEN) saw its shares hammered this morning on the heels of a weak earnings report, but the stock has bounced right back and is now approaching break-even on the day.
WEN had plunged as low as $9.39 earlier, down nearly 8% from yesterday’s close of $10.19. That was before an intraday bounce of over 7% brought the shares back to life, with investors stepping up big and buying the dip.
Wendy’s latest report featured the following:
- Q2 EPS of $0.10 per share beat estimates of $0.09.
- Revenue fell 21.8% from last year to $382.7 million, but easily beat estimates of $366.92 million.
- The company lifted its full-year 2016 EPS guidance to $0.39-0.40 from $0.38-0.40, which is in-line with estimates for $0.39.
- Forecast same-store sales growth of 1.0 to 2.0% for North America, down from a prior 3% estimate.
- Forecast restaurant margin of 19.0% at North America company-operated restaurants.
The markets didn’t like that negatively-adjusted same-store sales outlook one bit, and the stock initially sold off hard on the news. Same-store sales measure the performance of restaurants open at least one year, and is the preferred industry metric for comparing a chain store’s sales performance over the prior period.
Wendy’s shares were bouncing around the $10 level in Wednesday afternoon trading. WEN has now fallen 6.5% since the start of 2016, compared with a 7% gain in the S&P 500 during the same time period.
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