Wendy's Quarterly Profit Slumps 12%

Industries Reuters

(Reuters)

Wendy's reported higher-than-expected quarterly same-restaurant sales and profit, driven by the popularity of its value meals such as "4 for $4" and lower costs.

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The company's shares were up 5.2 percent at $15.89 in light premarket trading on Wednesday.

Wendy's in January added the Double Stack cheeseburger, which includes a burger, chicken nuggets, a small serving of fries and a drink, to its "4 for $4" value meals.

The meal and other promotions have helped the burger chain attract diners amid a drop in grocery prices in recent months, which is encouraging more people to cook at home.

Sales at restaurants open at least a year rose 1.6 percent, above the 1.1 percent growth expected by analysts polled by research firm Consensus Metrix.

Net income fell to $22.3 million from $25.4 million in the first quarter ended April 2, the company said.

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On a per share basis, the company's profit remained unchanged at 9 cents per share due to fewer outstanding shares from a year earlier.

Revenue fell 24.5 percent to $285.8 million from a year earlier, mainly because the company sold more restaurants to franchisees.

Analysts on average had expected earnings of 8 cents per share on revenue of $282.6 million, according to Thomson Reuters I/B/E/S.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Martina D'Couto)