Wendy’s (NYSE: WEN) group released earnings today, beating estimates by a penny. The company reported $0.02 earnings per share for the first quarter compared to – $.02 per share for the year-ago period. Earnings increased 14.7 percent to $92.1million, but that figure excludes a non-recurring charge of almost $8 million.
Consolidated revenues fell 3.1 percent to $837.4 million from $864 million in the year-ago period. Same store sales for Wendy’s increased 0.8 percent, but Arby’s sales fell by 11.5 percent.
Roland Smith, President and Chief Executive Officer of Wendy’s/Arby’s Group, said: “At Wendy’s, we are very pleased with our overall progress. We are making significant improvements in restaurant operations and customer service, our product development pipeline is strong, and we are connecting with customers through improved marketing. “
“For the quarter, we produced positive sales despite severe winter weather in February. Wendy’s same-store sales were among the strongest in the quick-service restaurant (QSR) industry. We successfully balanced our premium products with an effective value strategy… We also continued driving significant improvements in restaurant operations and improved our company-operated restaurant margin to 15.4%. In April, we focused on offering customers real value and quality … We are excited about our new product and promotional lineup for the summer.”
The stock price fell by almost 4 percent in morning trading.
Comments: If you aren’t seeing growth in a growing economy, you aren’t likely to see it in the future. No amount of trimming expenses or restructuring is going to put you into the growth game. Arby’s is pulling down the Wendy’s brand and is searching for new leadership. The company’s cash position is reduced from the prior quarter. And the company continues to take special write-offs. Wendy’s founder, Dave Thomas, never figured into the famous Cheech and Chong comedy sketch “Dave’s Not Here,” but it may help to explain the trials of this struggling company. The outlook is bearish.
Disclosure: No positions in the stocks mentioned.