Wendy’s adjusted 3Q net income beats Street
NEW YORK (AP) — Wendy’s third-quarter loss narrowed as more customers snapped up offerings at its restaurants including its new Pretzel Bacon Cheeseburger.
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 8.5 percent in premarket 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 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.
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.
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 94 cents to $8.15 before the market opened. The stock has nearly doubled since the beginning of the year, up 93 percent.