Wendy’s/Arby’s Group (NYSE:WEN) revealed a surprise first-quarter loss on Tuesday and trimmed its full-year view amid concerns about pricier commodities.
The Atlanta-based company said it lost $1.4 million, or nil cents a share, last quarter, compared with a profit of $3.4 million, or 1 cent a share, a year earlier. Analysts had called for EPS of 2 cents.
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Wendy’s/Arby’s, the No. 3 U.S. fast food chain, said its net sales inched up 1.2% to $847.8 million, narrowly surpassing the Street’s view of $845.6 million.
“Wendy’s generated positive systemwide same-store sales in the U.S., offset by softness in Canada,” CEO Roland Smith said in a statement. “Arby’s continued to build sales momentum and posted strong systemwide same-store sales growth in North America.”
Concerned about higher commodity costs, Wendy’s Arby’s cut its view on 2011 pro forma adjusted EBITDA to $330 million to $340 million. The company warned it sees commodity costs rising 5% to 6% in 2011.
“Margins will be negatively impacted by increases in commodity costs primarily driven by unprecedented beef prices that are affecting the restaurant industry,” Smith said.
The company said April same-store sales inched up 0.5% at Wendy’s, compared with a 4.4% jump at Arby’s.
Shares of Wendy’s/Arby’s gained 0.41% to $4.84 ahead of Tuesday’s open.