Tags: US | Earns | WendysArbys | Group

Wendy's Loss Narrows Despite Dismal Arby's Sales

Thursday, 04 Mar 2010 10:59 AM

 

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Fast-food chain Wendy's/Arby's Group Inc. said Thursday that its fourth-quarter loss narrowed, even as its Arby's chain continued to struggle.

An important sales measure skidded 11 percent at the restaurant chain known for its roast beef sandwiches and curly fries, and revenue fell almost 7 percent.

"The Arby's side of the business is a challenge right now," said Morningstar analyst R.J. Hottovy.

Executives said Thursday that they plan to expand Arby's value menu and invest in remodeling locations as it tries to woo back customers who abandoned the brand and its typically more expensive menu. It plans to boost its budget for construction projects by 65 percent.

"Arby's will re-emerge as a stronger brand as we focus our entire system on strategies to improve the customer experience, grow sales and expand store profits," CEO Roland Smith said in a statement.

For the quarter that ended Jan. 3, the Atlanta company lost $13.6 million, or 3 cents per share. That compares with a loss of $393.2 million, or 84 cents per share, during the previous year.

Excluding those one-time costs, the company earned 7 cents per share. Its quarterly adjusted profit was 5 cents per share in 2008.

Revenue climbed 0.5 percent to $900.9 million.

Analysts surveyed by Thomson Reuters expected the company to earn 3 cents per share with revenue of $914.8 million.

The Wendy's brand continued to fare better than Arby's. There, sales in restaurants open at least a year fell 3 percent. And Its revenue held steady.

For the full year, Wendy's/Arby's earned $5.1 million, or a penny per share. That compares with its 2008 loss of $479.7 million, or $1.24 per last year.

Its full-year revenue nearly doubled to $3.58 billion

Wendy's/Arby's formed in late September 2008 when Arby's owner Triarc Cos. Inc. bought Wendy's in an all-stock deal valued at $2.34 billion.

The company's shares fell 14 cents, or 2.8 percent, to $4.80 Thursday morning, after falling as low as $4.61 earlier in the session.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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