Wendy’s profit view squeezed by rising commodity costs, labor crunch By Reuters

(Reuters) -Wendy’s Co on Wednesday projected annual profit below market estimates as a widespread labor shortage and rising costs of raw materials eat into the fast-food chain’s margins, sending its shares down 4% in premarket trading.

The company said it expected annual adjusted earnings between 79 cents and 80 cents per share, compared with analysts’ average estimate of 82 cents, according to Refinitiv.

A worker crunch in the United States has made it difficult for restaurants to ensure adequate staffing, forcing some to hike wages and others like Domino’s Pizza (NYSE:) to cut store hours.

The industry has also reeled under a surge in prices of raw materials from chicken to edible oils and higher freight costs.

Wendy’s (NASDAQ:) company-operated restaurant margin, a key measure of profitability, declined to 14.4% in the third quarter from 16.9% a year earlier.

Its U.S.-same store growth of 2.1% also fell short of expectations of 4.4% as rivals McDonald’s (NYSE:) and Taco Bell parent Yum Brands launched new menu items and collaborated with celebrities to lure more customers.

But the Dublin, Ohio-based restaurant chain reported a 14.7% jump in same-store sales at its international restaurants, trouncing estimates of a 9.1% rise.

Wendy’s also increased its share buyback plan to $300 million, as part of which it would launch a $125 million share repurchase program in the current quarter.

Total revenue rose 4% to $470.3 million in the three months to Oct. 3. Wendy’s earned 19 cents per share on an adjusted basis, edging past estimates of 18 cents.