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Wendy's keeps 2013 view even as taxes, costs squeeze diners
(Reuters) - The Wendy's Co (WEN.O), the second-largest U.S. hamburger chain, reported higher quarterly profit and stuck by its 2013 profit forecast on Thursday, even as its customers face new financial pressures from higher taxes and gasoline costs.
Wendy's stock jumped 3.6 percent, or 2 cents, to close at $5.70 on Nasdaq after the company nudged up fourth-quarter profit results versus what it preannounced on January 16 due to lower-than-expected charges. The company also reiterated its 2013 adjusted earnings forecast of 18 cents to 20 cents per share.
Still, the chain that has received a sales bump from new menu items and renovated restaurants joined rivals ranging from Burger King Worldwide Inc (BKW.N) to Olive Garden parent Darden Restaurants Inc (DRI.N) in saying that diners are grappling with new financial strains.
"Consumers are no doubt feeling the effect of higher gasoline prices, the payroll tax increase, and delayed tax refund checks," Wendy's President and Chief Executive Officer Emil Brolick said in a conference call with analysts.
Wendy's fourth-quarter net income rose to $26.4 million, or 7 cents per share, in the fourth quarter from $4.0 million, or 1 cent per share, a year earlier.
Earnings per share were 1 cent higher than the company's preliminary announcement due to a smaller-than-expected charge related to discontinuing breakfast operations at certain restaurants and a reduction of depreciation and amortization net of taxes, executives said in a conference call with analysts.
Excluding items, Wendy's earned 9 cents per share, analysts said. That is 5 cents better than what analysts expected, according to Thomson Reuters I/B/E/S.
Revenue rose just over 2 percent to $629.9 million in the fourth quarter.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Jan Paschal)
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