Wendy’s/Arby’s Group Inc. narrowed its net loss in the fourth quarter, and reiterated that it would focus on the growth of its Wendy’s brand while exploring strategic alternatives for the Arby’s chain.
For the fourth quarter ended Jan. 2, Wendy’s/Arby’s net loss totaled $10.8 million, or 3 cents per share, which included after-tax charges of $16.5 million, or 4 cents per share. A year earlier, the company posted a net loss of $14.7 million, or 3 cents per share, including after-tax charges of $44.5 million, or 10 cents per share.
Revenue for the group’s fourth quarter fell 6.7 percent to $840.7 million, compared with $900.9 million in the fourth quarter of 2009, which had an extra operating week.
Fourth-quarter same-store sales rose 0.2 percent at Wendy’s restaurants in North America, comprising a decrease of 0.9 percent at corporate units and an increase of 0.6 percent at franchised locations. Comparable sales at Arby’s rose 2 percent, including gains of 2.9 percent at company-owned restaurants and 1.6 percent at franchised units.
For the full year, Wendy’s/Arby’s Group’s net loss totaled $4.3 million, or 1 cent per share, including after-tax charges of $64.7 million, or 15 cents per share. In fiscal 2009, the company reported a net income of $3.5 million, or 1 cent per share, which included charges of $84.7 million, or 18 cents per share.
Charges negatively affecting earnings stemmed from integration-related expenses, impairment charges, incremental advertising for Wendy’s test of breakfast, costs related to the Strategic Sourcing Group purchasing co-op, and a reversal of pension withdrawal expense.
The company also reaffirmed its 2011 outlook, which assumes the sale of the Arby’s brand at some point. Executives said the sale would pave the way for longer-term growth in earnings before interest, taxes, depreciation and amortization, or EBITDA, of between 10 percent and 15 percent beginning in fiscal 2012.
Wendy’s/Arby’s is projecting development for Wendy’s of 20 new corporate units and 65 new franchised locations in North America, as well as 65 international franchise units.
Atlanta-based Wendy’s/Arby’s operates or franchises a system of more than 10,000 quick-service restaurants worldwide, including nearly 6,600 Wendy’s units and 3,700 Arby’s locations.
Contact Mark Brandau at [email protected].