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Wendy's Returns to Higher Growth in July

By Jennifer Saibil – Aug 5, 2020 at 11:51AM

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Customers are coming back for breakfast and burgers.

Fast food was fast becoming scarce during the pandemic as dining rooms closed across the country, but many restaurants were able to shift operations and meet new demands as dining went digital and customers picked up curbside. 

Burger chain Wendy's (WEN -1.03%) had a sales dip in the second quarter, but growth resumed in July as life continued on in most areas of the U.S.

Bring on the breakfast

Wendy's comps decreased 6% in the second quarter, which ended June 28. For comparison, McDonald's (MCD -0.51%) comps decreased 24% in a similar time frame. Earnings per share were $0.11, down from $0.14 last year. As of Aug. 2, 99% of U.S. stores and 90% of international stores are open.

A three-patty Wendy's hamburger.

Image source: Wendy's.

While many small restaurants have been forced out of business during the pandemic, the larger chains have been able to pivot to digital ordering and drive-thru, delivery, or curbside pickup options to keep cash flowing. Wendy's ended the quarter with $338 million in cash and cash equivalents, and it issued its regular $0.05 dividend on Wednesday. 

Sales decreased 15% in April and grew each month since, returning to growth in June and rising a high single-digit in July, with 8.2% U.S. comps growth. Breakfast and digital were huge growth drivers.

CEO Todd Penegor said in a statement, "I'm more confident than ever that we will achieve our vision of becoming the world's most thriving and beloved restaurant brand."

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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