Wendy’s reports $3.97M loss in 3Q

Wendy’s reports $3.97M loss in 3Q
Staff Writer

The Wendy’s Co. reported a net loss for the third quarter, but revenue and same-store sales for its Wendy’s brand rose during the period.

For the third quarter ended Oct. 2, Wendy’s net loss was $3.97 million, or negative 1 cent per share, compared with a net loss of $909,000, or zero cents per share, in the third quarter of 2010.

The loss reflected its namesake brand’s net income from continuing operations of $2.5 million, offset by a $6.5 million loss from discontinued operations and the sale of the Arby’s Restaurant Group in July.

However, sales and traffic rose at Wendy’s restaurants in North America during the quarter, the company reported. Revenue increased $10.7 million, or 1.8 percent, to $611.4 million, compared with $600.7 million a year earlier.

Systemwide domestic same-store sales rose 0.9 percent, reflecting increases of 1.8 percent at company-owned locations and 0.7 percent at franchised units. The same-store sales increase at company-owned Wendy’s units comprised a 1.1-percent increase in traffic and a 0.7-percent increase in the average check.

Emil Brolick, the brand’s new chief executive, said menu introductions played a role in Wendy’s success in the third quarter and would continue into the fourth quarter. The chain introduced the Wild Berry Frosty parfait in July and the Monterey Ranch Crispy Chicken Sandwich, part of the My 99 Everyday Value Menu, in August.

At the start of the fourth quarter, Brolick added, Wendy’s completed the systemwide rollout of Dave’s Hot ‘N Juicy Cheeseburger. Meanwhile, a new line of burgers developed to fit between the premium Dave’s Hot ‘N Juicy platform and the value menu is scheduled to debut before the end of the year.

“Due to the success of our breakthrough launch, we will allocate incremental promotional support to Dave’s Hot ‘N Juicy Cheeseburger product line, along with advertising for the Asiago Ranch Chicken Club in November,” Brolick said in a statement.

“In late November, we will introduce the new ‘W’ cheeseburger product line as a mid-tier sandwich priced below our premium-quality cheeseburger,” he said. “This will enable us to offer consumers three hamburger product lines in our menu portfolio — signature, mid-tier and price-value.”

The brand also reaffirmed previously stated guidance that same-store sales would increase 1 percent to 3 percent for the fiscal year at company-owned restaurants in North America. It also reaffirmed that Wendy’s would open approximately 20 company-owned stores and 45 franchised locations in North America this year. It also expects to open about 35 international franchised locations.

Dublin, Ohio-based Wendy’s operates or franchises more than 6,500 restaurants in the United States and 25 international markets.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN

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