Wendy's Profit Rises, But Sales Fall As It Pushes Ahead With Restaurant Sales

The Wendy's Co. said Wednesday it had net income of $40.2 million, or 11 cents a share, in the second quarter, up from $29 million, or 8 cents a share, in the year-earlier period. Adjusted EPS from continuing operations came to 8 cents, compared with a FactSet consensus of 9 cents. Revenue fell to $489.5 million from $506.1 million, but was ahead of the FactSet consensus of $486 million. Same-restaurant sales rose 2.4%, ahead of the FactSet consensus of 1.7%. "We also realized a 40-basis-point year-over-year improvement in restaurant operating margin to 18.2 percent," Chief Executive Emil Brolick said in a statement. The company is on track with plans to reduce ownership of company-operated restaurants to about 5% of the total, and has completed the sale of company-operated restaurants in Canada, he said. It is also on track to sell the remaining 540 domestic restaurants targeted for sale to franchisees. "New and prospective franchisees are expressing strong interest in all of the markets, and we expect to sell approximately 280 of these restaurants during the second half of 2015," he said. Wendy's is raising its full-year adjusted EBITDA outlook to a range of $385 million to $390 million, from a prior range of $375 million to $385 million. Shares were indicating higher in light premarket trade, but are up 14% in the year so far, while the S&P 500 has gained 1.7%.