DUBLIN, Ohio (AP) - Wendy's (WEN) new value menu and focus on premium burgers helped its fiscal fourth-quarter net income top Wall Street expectations, the hamburger chain said Thursday.
Results show Wendy's push to position itself on the higher end of the fast-food pecking order in terms of quality seems to have gained some traction. Wendy's has also begun revamping restaurants with a modern look with causal seating areas more reminiscent of fast-casual chains such as Panera Bread Co. (PNRA).
Wendy's net income jumped to $22.4 million, or 6 cents per share, for the three months ended Dec. 30. That's up sharply from $4 million, or 1 cent per share, a year earlier. The current quarter's results included a tax benefit, lower interest expense and a sharp rise in investment income. Removing impairment charges, facility relocation costs and other items, adjusted earnings were 8 cents per share.
Revenue increased 2 percent to $629.9 million from $615 million.
Analysts surveyed by FactSet expected adjusted earnings of 4 cents per share on revenue of $637 million.
Wendy's, known for its Frosty shakes and square burgers, said that revenue at company-run North American restaurants open at least 15 months and remodeled restaurants reopened at least three straight months slipped 0.2 percent. The figure fell 0.6 percent for franchised restaurants. The performances are compared with the prior-year period, which included results from the introduction of its Dave's Hot 'n Juicy cheeseburgers.
Earlier this month Wendy's announced that it was switching to a "Right Price Right Size" value menu that includes items ranging from 99 cents to $1.99. The menu replaced its 99-cent value menu. At a time when costs for meat, cheese and other ingredients are rising, the revamped menu is intended to give budget-minded diners more options, while giving Wendy's more flexibility on pricing.
For the full year, Wendy's reported earnings from continuing operations of 1 cent per share. Adjusted earnings were 16 cents per share. Revenue rose 3 percent to $2.51 billion.
Wendy's Co. still expects fiscal 2013 adjusted earnings of 18 cents to 20 cents per share. Wall Street forecasts adjusted earnings of 17 cents per share.
Shares rose 15 cents, or 3.1 percent, to $5.05 in midday trading. Its shares have traded in a 52-week range of $4.09 to $5.42.
The Dublin, Ohio, company's guidance assumes a 2 percent to 3 percent increase in revenue at company-run North American restaurants open at least 15 months and remodeled restaurants reopened at least three straight months.
The chain plans to report its finalized results for the fourth-quarter and full-year on Feb. 28. It had 6,560 restaurants globally as of Dec. 30.