The COVID-19 outbreak and related containment measures have started significantly impacting Wendy's (WEN +5.04%) 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.
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"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.
