First Quarter highlights
* Systemwide sales grew 11.7% to a record $2.1 billion.
* Total revenues increased 10.2% to a record $612 million.
* Same-store sales grew 5.6% at Wendy's U.S. company restaurants in the quarter, on top of a 1.4% increase in 2001.
* Same-store sales at Tim Hortons restaurants in Canada grew 7.9% in the quarter on top of a 9.9% increase a year ago. Same-store sales at Tim Hortons restaurants in the U.S. grew 10.0% in the quarter on top of an 8.6% increase the year before.
* The Company and its franchisees opened 71 new restaurants in the quarter, including 45 Wendy's and 26 Tim Hortons.
* Wendy's domestic operating margin improved 100 basis points to 14.8% compared to the same quarter a year ago due to strong sales, supply chain management initiatives, utility management programs, lower crew turnover and easing crew wage inflation. The Company did incur certain crew training costs associated with the rollout of Wendy's new Garden Sensations(TM) salads in the quarter.
* Net income for the quarter increased 12.3% to $43.4 million and diluted EPS were $0.39, up 18.2% over $0.33 reported a year ago. Excluding a $0.01 per share asset gain in the first quarter of 2001, EPS increased 21.9%.
Chairman and Chief Executive Officer Jack Schuessler said: "We delivered strong results in the first three months of the year and we have excellent momentum. Our systemwide sales and revenues grew more than 10% due to strong same-store sales at company and franchised restaurants and new restaurant development. This was a very good quarter for our Company. We continued to focus on operations and quality food in our restaurants, and on our strategic initiatives.
"At Wendy's, sales of our new Garden Sensations salads are robust and meeting our expectations. Our national marketing program was very effective and our restaurant operators managed the new salad implementation very well. Customers like the quality and freshness of the ingredients, the new packaging, the variety of toppings and the fact that they can customize the salads. The premium salads are the latest example of our commitment to utilize consumer research and a disciplined product development process to significantly upgrade our core menu items," Schuessler said.
"At Tim Hortons, we continued to focus on customer service initiatives and quality products. Our annual 'Roll Up the Rim to Win®' promotion was very successful in both Canada and the U.S.," Schuessler added. "The Tim Hortons U.S. business continues to rapidly improve as we build our base of strong franchisees."
The company managed costs effectively in the quarter. General and administrative costs rose only 4.6% in the quarter to $56.3 million, and declined as a percent of revenues from 9.7% a year ago to 9.2%.
"We are very focused on growing our top-line sales and revenues while at the same time controlling costs effectively," said executive vice pesident and Chief CFO Kerri Anderson. "G&A is a major focus for our management team as we implement our strategic initiatives, invest in our core businesses and prioritize spending on the highest return projects."
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