Home » Black Swans » Wendy’s Where is the beef? Big pricing discussion. Nothing on commodity costs #WEN

Wendy’s Where is the beef? Big pricing discussion. Nothing on commodity costs #WEN

Wendy's

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Wendy’s (NYSE:WEN) disappointed investors with the latest quarterly results. The stock hovers just over the $5 level but seems to continue with a dividend despite all the restructuring. The earnings release focused primarily on top line items that the marketing guy’s worry about. Sales, new stores, new products.

Just a one line item about commodity costs and margins. This time the margin increased because of pricing and better sales leverage. Just what is better sales leverage? They do mention that the price increases out paced commodity increases of 140 basis points.

That normally is very good news. If you have pricing power and can pass on increasing costs that’s the mark of a winner. Strangely enough Wendy’s management did not expand on the point in the press release. Which means they are not confident they can pull it off again?

Will we see pricing compression soon? Does management see signs which are problematic? Will this be a Black Swan. Investors need to view this issue from a caveat emptor perspective?

One thought on “Wendy’s Where is the beef? Big pricing discussion. Nothing on commodity costs #WEN

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