Wendy's is challenging the popular saying "there is no such thing as a free lunch" with their latest promotion. In a news release titled "Holidays, Hugs, and Warm Nuggs," the fast-food company is offering a free six-piece order of nuggets with any purchase made through its app every Wednesday until the end of the year.
This limited-time initiative is available at participating U.S. stores and could be just what Wendy's needs to boost its business. The company's shares have experienced a 17% decline this year, while competitors like McDonald's, Starbucks, Chipotle Mexican Grill, and Domino's Pizza have seen positive growth ranging from 1.7% to 50%.
Although Wendy's reported mixed results for its third quarter on November 2, with U.S. same-restaurant sales growth falling from the year-ago quarter, the company still managed to beat analysts' earnings forecast by two cents. However, revenue fell short of estimates.
Analysts from BTIG, Peter Saleh and Ben Parente, noted that while there were some positive aspects in the sales trends, Wendy's still lags behind major competitors and faces challenges in a struggling industry and economy. They rated the company's shares at Neutral.
With a weak forecast for fourth-quarter same-restaurant sales, Wendy's needs to attract more customers. The free nugget promotion might be the answer to their problem.