Shares of Popeyes (NASDAQ: PLKI) plunged 10% during early trading hours on Wednesday after the company released weaker-than-projected same-store sales growth during its second quarter and has also lowered its same-store sales growth outlook. The company met analysts' expectations of $0.47 per share but missed revenue by $1.7 million.
"Slower sales were consistent with the sector. Even as Popeyes sales weakened during the quarter, the company grabbed market share, hitting a record of 26.6 percent of the quick-service chicken segment," said CEO of Popeyes Cheryl Bachelder.
According to CNBC, industrywide same-store sales continue to come up short of Wall Street expectations. Restaurants like Wendy's and Mcdonalds among others, have blamed growing consumer uncertainty ahead of November's election and increased competition from convenience stores, grocery chains and meal delivery services for the shortfall.
"I wish I knew," Bachelder added after the concern of the slowing sales, during an earnings conference call on Wednesday. She pointed to low consumer confidence, customers eating at home more often and menu fatigue associated with value promotions as possible catalysts.
"I think the sector needs to improve," she said. "The consumer needs to be eating out more often in general for all of us to prosper. ... I'd sure like to see more vitality in the sector on traffic."
Popeyes, which met analysts' expectations with its earnings of 47 cents per share, reported weaker-than-expected revenue of $61.7 million in the period. Wall Street had expected revenue of $63.4 million, according to Thomson Reuters.