ATLANTA Wendy's/Arby's Group Inc. significantly cut its net loss in the fourth quarter on fewer charges, but it continued to struggle with falling sales at Arby's.
The company reported a net loss of $13.6 million, or 3 cents per share, for the quarter ended Jan. 3, compared with a loss of $393.2 million, or 84 cents per share, for the same quarter a year earlier. After-tax charges totaled 10 cents a share in the latest fourth quarter, compared with 89 cents a share in charges in the year-ago period.
Fourth quarter revenue rose slightly to $900.9 million and reflected the impact of an additional week, Wendy's/Arby's said.
Wendy's continued to outperform Arby's in sales, posting a 3-percent decline in North American same-store sales, compared with a 11-percent drop at Arby's. Wendy's sales were aided by value offerings, including $2.99 Deluxe combo meals and 99-cent spicy chicken nuggets.
"We are making great strides re-energizing our Wendy’s brand and we believe our fourth-quarter same-store sales were among the strongest in the industry,” said Roland Smith, president and chief executive of Wendy’s/Arby’s Group.
Smith said value would be a major focus at both brands this year, especially at Arby's, which has expanded its $1 value menu to more stores. To date, more than 2,500 Arby's locations offer the value menu, which includes a Jr. Roast Beef sandwich, a Jr. Chicken sandwich, curly fries and other items.
Turnaround plans at Arby's also will include a "significant" remodeling effort, Smith said. Wendy’s/Arby’s expects to spend around $165 million this year to remodel 100 stores at each brand as well as open 12 corporate Wendy's locations.
Smith assumed interim leadership of the troubled Arby’s chain in January after Tom Garrett resigned his post as its president and chief executive. The search for a permanent replacement is ongoing.
“As interim president of Arby’s, I will lead the brand’s turnaround efforts until we select a successor,” Smith said. “Arby’s will re-emerge as a stronger brand as we focus our entire system on strategies to improve the customer experience, grow sales and expand store profits.”
Wendy’s/Arby’s Group operates or franchises 6,541 Wendy's locations and 3,718 Arby's units.
Contact Elissa Elan at [email protected].
