Wendy's profit hit by commodity costs, charges
SAN FRANCISCO (Reuters) - No. 3 hamburger chain Wendy's International Inc (WEN.N), which is being acquired by the parent company of Arby's, posted a worse-than-expected drop in quarterly profit, hurt by commodity costs and restructuring charges.
Second-quarter commodity costs jumped about $11 million from a year ago due primarily to rising grain and fuel prices, it said on Tuesday.
Net income from continuing operations fell to $19.9 million, or 22 cents per share, from $29.3 million, or 33 cents per share, in the year-earlier quarter.
Excluding 2008 and 2007 expenses from a restructuring and a special committee that handled the company's sale, the profit was 30 cents. On that basis, it missed the average Wall Street expectation of 37 cents, according to Reuters Estimates.
Revenue fell to $631.9 million from $632.9 million a year ago.
Sales at company-owned U.S. restaurants open at least one year were up 0.1 percent for the quarter, while franchise same-store sales at U.S. franchise restaurants rose 1.1 percent.
Wendy's and other restaurant operators have been reluctant to raise prices to offset higher costs for ingredients and fuel for fear of losing customers.
Triarc Cos Inc TRY.N, Arby's parent, is paying about $2 billion to buy Wendy's. Due to the pending merger, Wendy's said it would not host an analyst conference call and declined to provide detailed forecasts.
Shares closed up 5.3 percent at $24.20 on the New York Stock Exchange.
(Reporting by Lisa Baertlein; editing by Jeffrey Benkoe)
