Industry News | October 23, 2003

Wendy's Reports Q3 Results

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Wendy's International has announced results for the third quarter ended September 28, 2003. According to a company press release, highlights included:

  • Total revenues increased 11.7 percent to a record $807 million.
  • The Company and its franchisees opened 138 new restaurants systemwide during the quarter. The openings consisted of 68 Wendy's, 56 Tim Hortons and 14 Baja Fresh Mexican Grill restaurants.
  • Same-store sales results improved in the third quarter at Wendy's and Tim Hortons, on top of very strong sales in the third quarter a year ago. Wendy's U.S. company restaurants were up 0.5 percent for the quarter while franchised restaurants were up 0.9 percent. Tim Hortons same-store sales were up 5.5 percent in Canada and 6.8 percent in the U.S. Same-store sales at Baja Fresh declined 4.1 percent, which represents an improving trend.
  • Baja Fresh generated $40.2 million in revenues during the quarter, which was 5 percent of total revenues for the Company. EPS dilution for the Company from Baja Fresh during the quarter was approximately $0.025, versus $0.015 in the same quarter a year ago. The Company now expects total dilution from Baja Fresh for the year 2003 to be in a range of $0.06 to $0.08 per share due to lower than expected sales, higher commodity costs, investments in people and store opening costs in the fourth quarter.

    In the same statement, Wendy’s chairman and CEO Jack Schuessler said: "This was our best quarter of the year. Revenues continued to grow, same-store sales are improving and they were positive at Wendy's in August and September. New unit restaurant development is on track at all brands and we are pleased to produce good earnings growth.

    "At Wendy's, our new Homestyle Chicken Strips are generating customer traffic as consumers respond to another high quality product on our everyday menu.

    "We are very proud of our operators as Wendy's was cited by QSR magazine for the 'fastest drive-through window speed' for the fifth consecutive year. Our average time was 117 seconds, which is 10 seconds faster than a year ago and 30 seconds faster than any other chain mentioned in the QSR study. Continuous improvement by our operators is important because more than 65 percent of our sales occur at the pick-up window," Schuessler added.

    "At Tim Hortons, consumers continued to respond positively to our excellent service, 'Always Fresh' coffee and our Maple Pecan danish promotion during September. Tim Hortons recently introduced a new bacon, lettuce and tomato baguette sandwich and will be bringing back chicken stew this fall.

    "At Baja Fresh, same-store sales were negative during the quarter but improved compared to the second quarter. We are encouraged with sales trends in some key markets and Baja is attracting customers with its new 'Lighten Up' menu, which has several meals with less than 10 grams of fat. Baja Fresh continues to expand with new restaurants and strong franchise operators, and is on track to meet its development goals."