Wendy's/Arby's Group Inc. lost money in its first quarter as customers spent less at its Arby's locations and one-time charges pressured results.
The owner of Wendy's and Arby's restaurants said Thursday that it lost $3.4 million, or a penny per share, for the three months ended April 4. That compares with a loss of $10.9 million, or 2 cents per share, last year.
Removing 3 cents per share in charges, profit was 2 cents per share.
Revenue fell 3 percent to $837.4 million from $864 million.
Wall Street expected the Atlanta company to earn 1 cent per share on revenue of $835.2 million. The estimates of analysts surveyed by Thomson Reuters generally exclude one-time items.
Shares fell 21 cents, or 4.1 percent, to $4.88 in premarket trading.
Revenue at long-struggling Arby's restaurants fell 12 percent.
After failing to gain traction with its $5 meal deals, Arby's began testing its dollar menu last year before expanding it to its 3,700 locations in April. The menu includes a small roast beef or chicken sandwich as well as curly fries.
But the Atlanta company's first quarter ended in early April — before the restaurant chain could record much of the benefit from the nationwide rollout of the cheap eats, backed by heavy advertising.
Revenue at Arby's North American company-run restaurants open at least a year dropped 11.6 percent, while results for its franchised locations slid 11.4 percent.
In contrast, revenue at Wendy's restaurants improved to $584.7 million from $578.2 million. The chain posted a slight increase in revenue at North American company-run restaurants open at least a year as well as its franchised locations.
The company maintained that sales at Wendy's restaurants open at least a year will rise in 2010 and that Arby's results will fall. This figure is a key indicator of a restaurant operator's performance because it measures results at existing restaurants rather than newly opened ones.
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