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Wendy's posts $29M profit on strength of ad, operations, menu changes

DUBLIN Ohio Wendy’s International Inc. swung to a net profit of $29.2 million for its second quarter ended July 1 from a loss of $29.1 million for the comparable period of a year ago, when Wendy's took a write-down for the sale of the Baja Fresh fast-casual chain.

The parent of the nation's third-largest burger chain credited new menu items, the new “That’s Right” advertising campaign and improving operations for the positive earnings. The results come as Wendy's is contemplating a sale and other ways of boosting the value of its stock.

Revenue for the most recent quarter totaled $632.9 million, nearly even with the $634.1 million of a year ago.

Same-store sales for Wendy's were barely positive at 0.7 percent for U.S. company-owned restaurants and 0.4 percent for franchised ones. The chain has been pursuing a strategy of raising its prices to bring them closer to what competitors are charging for comparable products. Chief executive and president Kerrii Anderson acknowledged that the adjustments are dampening transactions in the short term, but predicted that the effect would be positive in the long term.

Product introductions during the quarter included the Baconator oversized burger, the Triple Stack cheeseburger, the 99-cent Buffalo Crispy Chicken sandwich, the Frosty Float and a new coffee, Wendy’s Custom Bean. A breakfast expansion is on track to be in 650 restaurants by the end of August.

Although Wendy’s opened 30 new franchised and 9 company-owned restaurants during the quarter, the number of restaurants fell to 6,661, compared to 6,743 at the same time last year, due to closures of underperforming restaurants, the company said. The vast majority of restaurants, 5,958 units, are domestic.

A committee that Wendy’s formed in April has been meeting to determine how to boost the stock price.

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