Shares of Wendy's International
Wendy's now forecasts third-quarter earnings of $0.59 to $0.60 per share, short of the $0.64 per-share analyst estimate.
The company, which operates 1,030 Wendy's restaurants in the storm-battled states of Florida, Georgia, Alabama, Louisiana, and Mississippi, has lost over 2,000 store days to Hurricanes Charley, Frances, and Ivan. Those states represent about 18% of Wendy's U.S. stores. In addition, the poor weather that followed the hurricanes hurt customer traffic, particularly in the Southeast and Northeast regions of the U.S.
The result was a same-store sales decline of 1%.
There's more. Structural damage from the hurricanes also amounted to three separate insurance deductibles costing a total of $750,000. And as if that wasn't enough, lease termination costs related to the closing of five Baja Fresh restaurants cost an additional $500,000. The company also increased its legal reserves.
Wendy's, the third-largest burger chain in the U.S. behind McDonald's
As we've discussed in recent days, hurricanes have been good to some companies, including Home Depot
Wendy's clearly falls into the latter category.
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Fool contributor Jeff Hwang owns none of the companies mentioned above.