“Where’s the beef?” was the tagline for Wendy’s (WEN) famous ad campaign that began in 1984. The answer now: apparently not at Wendy’s.
Shares of the iconic fast food chain fell Tuesday after two Wall Street analysts reported that a substantial number of Wendy’s chains were sold out of beef items.
Meat supply has turned into a national problem as major processors have been forced to close their plants because of risks to their workers from the coronavirus. Some experts are worried about potential shortages.
As for Wendy’s, about 18% of its restaurants were “completely sold out of beef items as of Monday evening,” Stephens analyst James Rutherford wrote in a report, according to Bloomberg.
He cited research from his firm’s data strategy team, which analyzed the Internet menu of every Wendy’s in the country.
To be sure, of the 1,043 restaurants Stephens counted as out of beef, 128 were still selling beef chili.
Wendy’s is more vulnerable to meat shortages than its competitors because of its “famous focus on fresh beef,” Rutherford said.
But “a short outage is not material,” Rutherford said, affirming his overweight rating on Wendy’s stock.
In a less scientific survey, Stifel analysts randomly visited Wendy’s outlets, finding that 5% to 10% didn’t offer beef.
"While we believe this is a transient issue, ... further interruptions [in beef supply] could lead to share-price volatility in the near-term," the analysts, led by Chris O'Cull, wrote in a report, according to MarketWatch.
Wendy’s shares recently traded at $18.63, down 3.4%. They have dropped 17% in the past three months, compared with a 13% slide for the S&P 500.