(Bloomberg) -- Wendy’s Co. has cut its earnings outlook as it spends to roll out breakfast across the U.S. Shares fell on the news.
Breakfast, which is already in more than 300 locations, will roll out nationwide in 2020, the Dublin, Ohio-based company said in a statement Monday. The expansion into thousands of more sites will bring a one-time upfront investment of about $20 million this year.
Wendy’s now expects earnings per share, excluding some items, to decline between 3.5% and 6.5% in 2019. A month ago, it had been forecasting growth of 3.5% to 7%.
The breakfast push comes at a time when fast-food chains are locked in a battle to win customers amid aggressive discounting and more competition. McDonald’s Corp. has also been working to lure more morning diners with a recent test of doughnut sticks in the U.S. Wendy’s says its new lineup includes a honey-butter chicken biscuit and breakfast Baconator sandwich. Wendy’s has previously tried pushing breakfast in past years with lackluster sales results.
Adjusted EBITDA will be flat to down 2%, below the 2.5% to 4.5% growth it had been targeting. Wendy’s held steady its systemwide sales growth forecast and capital spending targets for 2019. To support breakfast, the company and its franchisees are planning to hire about 20,000 workers.
Wendy’s shares fell as much as 8.9% to $20 in late trading after the announcement, before paring some of the loss. The company said it plans to give additional long-term guidance at its investor meeting on Oct. 11.
(Updates shares and adds investor day in last paragraph)
--With assistance from Craig Giammona.
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