|Wendy's adjusted 3Q net income beats Street||| Print ||
|Written by Associated Press|
|Thursday, 07 November 2013 11:08|
NEW YORK (AP) — Wendy's third-quarter loss narrowed as more customers snapped up offerings at its restaurants including its new Pretzel Bacon Cheeseburger and Pretzel Pub Chicken sandwich.
Results beat expectations and the company raised its guidance Thursday.
However, the company said it expects adjusted earnings, before taxes, interest, and other items, to fall 10 percent in the fourth quarter, as it invests in future growth initiatives.
Shares fell 8.3 percent in morning trading, retreating from a five-year high on Wednesday.
Fast-food companies have been facing tough competition from popular chains such as Panera Bread or Chipotle, which have a more upscale image and the ability to charge higher prices for their food.
Executives at Wendy's Co. have been particularly vocal about their intention to recast the chain as being more in line with the likes of Panera Bread Co. They've been offering more premium buns. On Thursday the chain said it is bringing back its Bacon Portabella Melt and serving it on a toasted brioche bun.
Wendy's is pushing renovations to make its restaurants more inviting, in addition to rolling out more items positioned as premium offerings.
The company, based in Dublin, Ohio, says sales rose 3.2 percent at restaurants open at least a year, a key retail metric.
For the quarter, Wendy's net loss totaled $1.9 million, or break even per share, compared with a loss of $26.2 million, or 7 cents per share last year. Excluding costs related to paying back debt early and selling some restaurants, net income was 8 cents per share.
That's two cents better than Wall Street had expected. Revenue edged up nearly 1 percent to $640.8 million, which was also better than most analysts had projected.
Janney Capital Markets analyst Mark Kalinowski said Wendy's will generally continue to rise as it's "a cut above" brand positioning resonates and more stores are remodeled.
The company now expects adjusted earnings of 25 cent per share for fiscal 2013, from prior guidance of 20 to 22 cents per share. Analysts had expected 23 cents per share.
Shares fell 76 cents, or 8.3 percent, to $8.34 during morning trading. The stock has nearly doubled since the beginning of the year, up 93 percent.
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