Wendys CEO on impact of inflation on business

Wendy's CEO Todd Penegor explained how the fast-food chain could be impacted by rising labor costs and what the company is doing to mitigate the changes. Subscribe to CNBC PRO for access to investor and analyst insights: https://cnb.cx/2Vtntx6

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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