Wendy's International, Inc. (NYSE: WEN - news) announced today that fourth quarter earnings per share grew 18% to $0.33. The strong performance was driven primarily by outstanding sales growth at Wendy's U.S. and Tim Hortons Canada, store-level productivity initiatives and cost controls.
Results for the quarter, which ended on January 2, 2000, also included domestic operating margin expansion and further progress on strategic initiatives to improve shareholder value.
Fourth Quarter Highlights
Chief Financial Officer Frederick R. Reed said, "Our fourth quarter performance was better than expected due primarily to sales growth, margin expansion and good control of corporate and store-level costs. We were very pleased with the 27% increase in base earnings per share. It was a quality quarter as our core businesses delivered excellent results and we made progress on our strategic initiatives."
John T. Schuessler, president and chief operating officer of Wendy's U.S. operations, added, "Our sales results were outstanding considering the heavy promotional activity by our competitors and our strong fourth quarter a year ago when Wendy's average unit volumes increased 10%. Our Service Excellence(TM) program and national marketing messages for Bacon Mushroom Melt and Spicy Chicken(TM) sandwich were very effective inbuilding customer transactions."
Paul D. House, president and chief operating officer of Tim Hortons, said, "1999 was the third year in a row in which our same-store sales growth exceeded 8%. Our growth strategy focuses on delivering our Always Fresh¨ coffee and baked goods with fast and accurate service. Over the past few years, we've been successful in building sales by introducing several new products such as iced cappuccino and Tim's Own¨ sandwiches to expand our customer base."
Progress on Strategic Initiatives
The Company continues to make progress on its strategic initiatives intended to create shareholder value by:
"Our overall progress in 1999 was outstanding," said Reed. "Our core Wendy's North America and Tim Hortons Canada businesses are extremely healthy and we have excellent momentum. Base EPS growth for the year was better than expected, reflecting the robust sales trends, effective store-level productivity initiatives and cost controls. We also continue to make considerable progress on improving return on invested capital."
"Our Service Excellence program to improve Wendy's customer service and service times at the pick-up window was very successful in 1999," said Schuessler, "and we will continue to roll it out across the Wendy's system in 2000. We have multiple sales driving strategies in place for 2000. In addition to our late night, Biggie¨ sizing and Classic¨ hamburger programs, we continue to deliver quality products and plan to introduce and test new promotional products in 2000."
Quarterly Dividend Approved
The Board of Directors today approved a quarterly dividend of 6 cents per share, payable on March 7 to shareholders of record as of February 22. It will be the Company's 88th consecutive dividend payment to shareholders.
2000 Corporate Goals
The Company's goal for Base EPS and Total EPS growth continues to be 12% to 15%. For the year 2000, the primary drivers for sales, profit and shareholder value include: Continued same-store sales growth at Wendy's U.S. and Canada, and Tim Hortons in Canada. The Company's goals for same-store sales growth in 2000 are similar to the long-term averages of about 3.5% to 4% for Wendy's U.S. and 5% to 6% for Tim Hortons Canada.
U.S. January 2000 Sales Results
The Company's growth continued in January, with same-store sales up 1.5% to 2% at Wendy's U.S. company units and 10% to 11% at Tim Hortons in Canada. Severe winter weather in the Southeast U.S. and Mid-Atlantic states adversely affected customer traffic at Wendy's during the first month of the year. McCorkle Named Corporate Secretary The board of directors named Senior Vice President and General Counsel Leon M. McCorkle Jr. as corporate secretary. McCorkle, who joined the Company in 1998, replaces as secretary Frederick R. Reed, the Company's Chief Financial Officer. Reed remains on the board.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements, or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events.
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