The COVID-19 outbreak and related containment measures have started significantly impacting Wendy's (NASDAQ:WEN) business. The fast-food company said on Thursday that sales trends turned sharply lower in mid-March thanks to a raft of temporary restaurant closures and other moves aimed at slowing the spread of the virus.
Sales had been trending 4% higher through the first two months of the fiscal first quarter, right in line with management's forecast. However, that figure changed to a 20% decline during the week ended on March 22, the company said.
"This is an unprecedented time," CEO Todd Penegor said, "and we are focused on the actions where we can make a positive difference." Wendy's joins businesses across the fast-food, casual dining, and sit-down dining niches in reporting major traffic declines in this era of social distancing. Darden Restaurants, the owner of Olive Garden, noted a similar 21% sales decline at the start of national virus containment measures.
Wendy's continues to offer drive-through, delivery, and to-go services across most of its sales footprint. The supply chain is operating smoothly, too.
But volumes are likely to drop significantly, and so the company withdrew its short-term and long-term business outlooks and is raising extra cash. Management promised investors more details about its operating trends when the company reports its first-quarter results in early May.