On a preliminary basis, the company expects to report fully diluted EPS of $0.33 per share in the first quarter, compared to $0.30 per share in the same period a year ago. While the first quarter will be lower than the company's full-year goal of 12-15% EPS growth, management expects stronger performance in the remainder of the year.
At Wendy's® company operated restaurants in the United States, same- store sales are up about 1.0% year to date, on top of a 3.5% increase in the first quarter a year ago. Wendy's restaurants continue to produce positive sales results despite weather issues and discounting within the quick-service restaurant industry. Wendy's restaurant-level margins are being affected by sales volumes and higher than expected costs for beef and utilities.
Tim Hortons® continues to deliver outstanding sales performance and is delivering higher than expected earnings for the company. At Tim Hortons restaurants in Canada, same-store sales year-to-date are up about 10%, on top of a 10% increase in the same period a year ago. At Tim Hortons restaurants in the U.S., same-store sales are up about 9.5% on top of a 14% increase a year ago.
``We continue to focus our Wendy's system on superior restaurant operations, our Service Excellence® program, quality products and balanced marketing, rather than short-term price promotions,'' said chief executive officer and president Jack Schuessler. "Our strategy has produced very strong ratings from consumers for the Wendy's brand and we will continue to focus on proven programs.
"Tim Hortons is producing great sales results and rapid overall growth,'' Schuessler added. "It's important to understand the balance we have with Tim Hortons, especially in a period such as our first quarter when our Wendy's business is facing some short-term challenges. Tim Hortons provides about one quarter of our revenues and about one-third of our pretax income.''
The company also announced today that it is repurchasing its common shares. The Company has purchased about $490 million in common shares since it began its repurchase program in 1998.
"We believe our Company is undervalued and that our stock is a good investment,'' said Executive Vice President and Chief Financial Officer Kerrii Anderson. "We have a strong balance sheet and cash position which enables us to continue our share repurchase program. At the same time, we are able to pursue opportunities to develop additional growth engines for the corporation. The recent announcement of our joint venture with IAWS Group, plc, to develop a new growth engine for Tim Hortons is one example of our strategic direction.''
