NEW YORK ( TheStreet) -- Several weeks ago, following a couple of analysts' downgrades, I talked about the delicate balance that Wendy's (WEN - Get Report) faces in trying to present value to customers while also attracting more investors.After years of under-investing in its business when compared to rivals such as McDonald's (MCD), which has been transforming the appearance of its U.S. restaurants for several years now, Wendy's recently decided it was time to do the same. The company announced plans to remodel 20% of its U.S. restaurants over the next two years, which means 1,300 stores will get facelifts out of the 6,500 locations that Wendy's has in North America.
Meanwhile, when compared to the more "upscale" quick-service restaurants Wendy's wants to model itself on, it still lacks the profile of Chipotle Mexican Grill (CMG) and Panera (PNRA). The question is how well can Wendy's convince the Street that revitalization efforts can boost traffic and profit margins. First-quarter earnings, which arrived better-than-expected, suggest that Wendy's is on the right path and is making good progress. There must always be a caveat when discussing restaurant performance, one of which is these results, which have been broadly weak throughout the entire sector, need to be taken in the proper context. I'm seeing articles with headlines stating that Wendy's first-quarter profits plummeted 83% to $2.1 million.