Shares of fast-food restaurant chain Wendy's (WEN - Get Report) fell on Tuesday after the company lowered its 2019 financial outlook amid plans to invest about $20 million to retrofit and support its U.S. stores and franchisees to serve breakfast, including hiring more employees.
Shares of the Dublin, Ohio-based company were down nearly 12% in mid-morning trading after the company said it was scaling back its adjusted per-share earnings outlook -- to an adjusted earnings per-share drop of between 3.5% to 6.5% for 2019 vs. previous guidance of per-share earnings growth of between 3.5% and 7%.
The announcement prompted two responses from analysts -- one positive and one more cautious. Analysts at SunTrust raised their one-year price target to $24 from $22, while analysts at BTIG downgraded their rating on the stock to neutral from buy.
Wendy's will provide an update to its 2020 goals at its investor day on Oct. 11.
The iconic burger chain currently serves breakfast in more than 300 of its restaurants. At the end of 2018, it had 5,810 stores in the U.S., according to regulatory filings. To support the breakfast expansion, Wendy's and its franchisees plan to hire an additional 20,000 employees.
The company in August served up better-than-expected second-quarter earnings but came up shy on the top line. Adjusted earnings in the quarter were 18 cents a share, up from 14 cents in the same period a year earlier. Analysts had been expecting 17 cents.
Wendy's stock was down 11.55%, or $2.53 a share, at $19.42 in morning trading on Thursday. The stock ended the day Monday down 1.92% at $21.95.
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