Industry News | July 10, 2001

Wendy's Expects 11% Growth in 2Q

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The company expects to report second quarter net income of about $56 million, up 11% compared to a year ago, and diluted earnings per share of $0.47, a 9% increase over $0.43 per share a year ago. The EPS results include $0.02 per share in asset gains in the second quarter both this year and a year ago. The company's quarter ended on July 1 and management plans to report its results on August 1.

Chairman and CEO Jack Schuessler said: "Including our second quarter performance, we expect that our net income and EPS will increase about 10% for the first half of the year 2001, which is excellent considering the conditions we've faced. Wendy's® has produced same-store sales growth this year, Tim Hortons® is delivering excellent results and our new store development is on track. We've been able to deliver good results despite a softening economy, certain commodity cost increases and utility cost pressures.''

The company expects to produce net income and EPS growth in the 11-13% range for the full year 2001, which would produce EPS in the $1.70 to $1.73 range. Diluted EPS for the year 2000 was $1.44. Excluding International charges of $0.09 per share, EPS was $1.53.

"We are committed to growth and have demonstrated that we can weather difficult periods,'' said Schuessler. "We expect the second half of the year to be slightly stronger due to our progress on key restaurant operating programs such as Service Excellence, strong marketing calendars for both brands and productivity programs intended to offset rising costs.''

At Wendy's company operated restaurants in the United States, same-store sales in June increased 3.1%, on top of a 2.4% increase during the same period a year ago. Same-store sales were up 2.8% for the second quarter.

"Wendy's restaurants continue to produce positive sales results that are among the best in the quick-service restaurant industry,'' said Tom Mueller, president and chief operating officer of Wendy's North America.

"While Wendy's restaurant-level margins will be down in the quarter due to higher than expected costs for beef and utilities, we are optimistic about producing better results in the second half of the year. We are determined to build traffic with a focus this summer on our Super Value Menu(TM) and our Late Night program,'' Mueller added. "We continue to see moderation in the rate of crew wage rate increases.''

Tim Hortons continues to deliver outstanding sales performance and is delivering higher than expected earnings for the Company. At Tim Hortons in Canada, same-store sales in June increased about 5.1%, on top of a 9.7% increase during the same period a year ago. Same-store sales were up 7.1% for the second quarter.

"The Tim Hortons chain is producing strong sales and rapid overall growth,'' said Paul House, president and chief operating officer of Tim Hortons. "Our new products and our focus on restaurant operations continue to pay dividends. The Honey Dijon chicken sandwich is our newest product introduction.''

The company plans to host its second quarter conference call and Internet web cast on Wednesday, August 1, 2001, at 4:00 p.m. (eastern). To access the company's web cast, go to www.wendys.com , select "investor information and news releases'' and then select earnings web cast.

The Company plans to host its 2001 Analyst and Investor Meeting on Tuesday, September 25, at Tim Hortons Canadian headquarters in Oakville, Ontario. The meeting will feature presentations about Tim Hortons, a tour of the chain's research and development facility in Oakville and several store visits.