Earnings Preview:
Wendy's International Inc.
By Associated Press
The Motley Fool
August 4, 2008
Wendy's International
Inc. reports earnings for the second quarter on Tuesday. The following is a
summary of key developments and analyst opinion related to the period.
OVERVIEW: Wendy's, the No. 3 hamburger chain in the
Triarc will pay about $26.78 per
share for the company. Triarc Chief Executive Roland
Smith will become CEO of both brands.
During the quarter, Smith warned Wendy's employees that some
job cuts may be necessary following the acquisition, which is expected to close
in the fall.
Wendy's also pre-released its same-store sales, or sales at
stores open at least a year, for the quarter. The chain said same-store sales
at company-owned restaurants rose 0.1 percent. Systemwide,
which includes franchised locations, same-store sales rose 0.9 percent. The
company said its sales were helped by Easter being included in the first
quarter's results.
The
BY THE NUMBERS: Wendy's has not offered any outlook for the
quarter. Analysts polled by Thomson Financial expect profit of 37 cents per
share on revenue of $626.7 million.
ANALYST TAKE: Cowen and Co. analyst Paul Westra
said in a note to investors when the company release its same-store sales in
July that although business at the chain had deteriorated in recent months,
"we also believe that the Wendy's brand is not just 'salvageable' but
should make for a comparatively low-risk, relatively fast turnaround
play."
He said he expects the company's shares to rise within the
next year.
WHATS AHEAD: Investors will be watching to see how well the
company integrates with Arby's. Most analysts are also watching Smith's first
moves as CEO of the combined company to see whether he can reinvigorate the
brand to compete better with its larger rivals, McDonald's Corp. and Burger
King Corp.
STOCK PERFORMANCE: Shares jumped 19 percent in the quarter
but fell 32 percent during the past 52 weeks.
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