Bahadur blog

Wendy's/Arby's posts 4Q net loss, lower revenue

ATLANTA – Wendy's/Arby's says its fourth-quarter loss shrank from a year earlier, despite a 7 percent drop in revenue that the company blamed "largely" on this year's fourth quarter being a week shorter than last year's.

In a report that Wendy's/Arby's Group Inc. called "preliminary," the company said Wednesday its net loss was $10.8 million, or 3 cents per share, for the three months that ended Jan. 2. It lost $14.7 million, or 3 cents per share, a year earlier.

Excluding one-time charges, the Atlanta restaurant operator — which is trying to sell its struggling Arby's business — said it earned a penny per share.

Analysts polled by Factset, who typically exclude one-time items, were expecting the company to break even on revenue of $841.4 million.

The company said its quarterly revenue fell to $840.7 million from $900.9 million.

Fourth-quarter revenue at Arby's restaurants open at least a year grew 2 percent, which "demonstrates progress on Arby's turnaround," the company said. The figure is considered a key indicator because it excludes restaurants that recently opened or closed. Total revenue for the chain fell less than 5 percent, compared with more than 7 percent at Wendy's.

"2011 will be a transition year as we explore strategic alternatives for Arby's, including a sale of the brand, reduce our corporate (expenses) to support a single brand and focus our energies on investing in Wendy's growth opportunities," President and CEO Roland Smith said in a statement.

During the economic downturn, Arby's has struggled more than Wendy's and other chains because its sandwiches — which can cost $5 or more — are more expensive than many other fast-food offerings.

For the full year, the company's preliminary report shows a net loss of $4.3 million, or 1 cent per share, including one-time charges of 15 cents per share. In 2009 it earned $3.5 million, or 1 cent per share, from continuing operations.

The company's full-year revenue fell slightly, to $3.4 billion from $3.6 billion.

Shares of Wendy's/Arby's climbed 3 cents to $4.65 in after-hours trading The stock had closed down 3 cents at $4.62.

The company is hosting an investor day Thursday in New York.