UPDATE: Wendy's Posts Downbeat Q2 Profit, Announces Plan To Sell Canadian Restaurants
Wendy's (NASDAQ: WEN) reported weaker-than-expected second-quarter profit.
The Dublin, Ohio-based company posted quarterly earnings of $29 million, or $0.08 per share, versus $12.2 million, or $0.03 per share, in the year-ago period. Excluding certain items, its adjusted profit rose to $0.09 per share from $0.08 per share. The year-ago results included a $21.0 million pretax charge from the early extinguishment of debt.
Its total sales fell 19.5% to $523.4 million versus $650.5 million. However, analysts polled by Thomson Reuters expected a profit of $0.10 per share on revenue of $518.11 million.
Wendy's same-store sales rose 3.9% for company-operated locations, while franchise same-restaurant sales gained 3.1%.
The company attributed the decline to "lost revenue following the sale of 418 Company-operated restaurants to franchisees as part of the Company's system optimization initiative, partly offset by same-restaurant sales growth and increases in both rental income and franchise royalties."
Its adjusted EBITDA rose 2.1% to $104.2 million from $102.1 million, while operating profit climbed 12.1% to $63.9 million from $57.0 million.
The company also announced a $100 million share repurchase program.
President and Chief Executive Officer Emil Brolick said, "Our second-quarter Adjusted EBITDA and Adjusted Earnings Per Share growth were in line with our expectations."
For 2014, the company reaffirmed its adjusted earnings forecast of $0.34 to $0.36 per share. Wendy's also announced its plans to sell 100% of its Canadian operations to franchisees.
Wendy's shares fell 0.62% to close at $7.98 yesterday.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.