ATLANTA Triarc Cos. Inc., brand parent to the 3,600-unit Arby’s chain, said fourth-quarter operating profit at its restaurant division jumped 37 percent from a year ago to $32 million. The profit surge was attributed to new unit development, positive franchisee same-store sales and expense controls that helped steady operating margins.
In its fourth-quarter financial results, Triarc also reaffirmed its intention to grow through acquisitions. It also noted that, with the sale late last year of its asset-management arm, Deerfield & Co., the company is now poised as a “pure-play” restaurant company. Triarc’s non-executive chairman, Nelson Peltz, has been courting Wendy’s International Inc., the parent to the No. 3 hamburger chain, as an acquisition target. He most recently nominated six executives to serve on Wendy’s board of directors in an attempt to gain control of the quick-service company. Peltz already had succeeded in obtaining three Wendy’s board seats for affiliated executives.
At Arby’s, operating profit totaled $32 million for the quarter ended Dec. 31, versus $23.3 million a year ago. Restaurant revenues rose 5 percent to $307 million, from $292.4 million in the year-earlier quarter.
For the full year, the restaurant system’s operating profit increased to $108.7 million, compared with $95.3 million in 2006. Full-year restaurant revenues rose to $1.20 billion from $1.15 billion a year earlier, reflecting 103 new restaurants but flat systemwide same-store sales.
Same-store sales at corporate locations fell 2 percent for both the latest quarter and the year, while at same-store sales at franchised locations rose 2 percent for the quarter and 1 percent for the year. Arby’s officials said same-store sales were hurt by reduced traffic but aided by price increases.
For the current year, the company anticipates positive same-store sales growth from both corporate and franchised restaurants. Those increases, the company said, will come from an increase in national advertising and new menu items, which it did not reveal. Arby’s also said it planned to open 50 corporate units in 2008, and that franchisees had committed to open 386 units through 2014.
Including the months of Deerfield & Co.’s revenues and profit, as well as gains from its sale, consolidated results for Triarc included net income of $33.3 million, compared with a net loss of $2.1 million in the year-earlier fourth quarter. Total latest-quarter revenues fell 3.4 percent to $320.6 million. For the full year, consolidated profit totaled $16.1 million, versus a year-earlier loss of $10.9 million. Fiscal 2007 revenues increased 1.6 percent to $1.26 billion.