Amid Rising Inflation, Wendy’s CEO Says Restaurant is Seeing Labor Costs Pressure

1. Wendy’s saw pressure from higher wage costs in its first quarter of the year, but the company is dodging rising commodity prices, CEO Todd Penegor told CNBC.
2. “From a commodity outlook perspective, because we’re largely locked in, we’re guiding flat to commodities this year, so we’re in a good spot there,” he said on “Mad Money.”
3. The comments come as the latest inflation data showed consumer prices rose last month at the fastest rate in more than a decade.

Rising chicken prices and other commodity costs won’t weigh on Wendy’s operations, but the fast-food chain is feeling the pinch of higher wages, CEO Todd Penegor said on CNBC Wednesday.

“From a commodity outlook perspective, because we’re largely locked in, we’re guiding flat to commodities this year, so we’re in a good spot there,” he told Jim Cramer in a “Mad Money” interview, adding the company is seeing a “little bit of pressure on labor — access to labor, cost to labor.”

The comments come as the latest inflation data showed consumer prices rose last month at the fastest rate in more than a decade. The Labor Department reported earlier Wednesday that the consumer price index, a measure of inflation, shot up 4.2% from a year ago, higher than economists projected.

Wendy’s also reported first-quarter earnings before the market opened. The company said it generated $460 million of revenue and earned 20 cents per share, beating Wall Street’s estimate of $445 million and 20 cents, according to FactSet.

In the quarter that ended April 4, global same-store sales rose 13% from a year ago.

Shares of Wendy’s declined 1.40% to $22.48 as part of a broader market sell-off.

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