USA: Wendy's sales hit by hurricanes
US fastfood giant Wendy's International has said third-quarter same-store sales at Wendy's branded restaurants decreased 5.0% at US company stores and 5.5% to 5.7% at US franchised restaurants, compared to positive sales in the quarter a year ago.
Tim Hortons same-store sales increased 3.6% to 3.7% for the third quarter to 2 October at restaurants in Canada and 4.7% in the United States, compared to very strong sales in the quarter a year ago. Baja Fresh Mexican Grill's system same-store sales declined 4.1%.
"Sales at all brands were impacted by record high gasoline prices and lower consumer spending levels, and store closings from hurricanes Katrina and Rita impacted Wendy's restaurants during the period," said chairman and CEO Jack Schuessler. "We are not pleased with our Wendy's and Baja Fresh sales trends, and everyone in the organisation is focused on improving results."
The company's preliminary estimate is that the hurricanes negatively impacted third-quarter earnings by 2 cents per share.
"We are focused on reinvigorating Wendy's sales growth with a fanatical approach to execution in restaurant operations, marketing and research and development," said Schuessler. "We are also making progress on our strategic initiatives, including the sale of certain Wendy's real estate assets and initial steps in the process of closing of underperforming stores and refranchising certain company-owned stores."
As previously announced, the company's 2005 third-quarter beef costs were $1.55 per pound, up 18% compared to $1.31 in the third quarter of last year. Higher beef costs are expected to have a negative impact of 2 cents on third-quarter earnings per share.
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