Wendy's Arby's Group
posted disappointing quarterly results early Thursday and lowered its 2010 outlook.
Wendy's Arby's said systemwide same-store sales at Wendy's restaurants decreased 1.7% in its fiscal second quarter, ended July 4, while comps at Arby's fell 7.4%. The Atlanta-based company expects Wendy's comps will be positive in the current quarter, while same-store sales at Arby's will remain negative for the quarter, with sequential improvement quarter-over-quarter.
Shares of Wendy's Arby's fell 1.2% in morning trading.
, which competes with Wendy's Arby's in the fast food sector, said earlier this week its comps surged 7% in July, fueled in large part by its beverage business. It was the burger-and-fries chain's biggest monthly increase by that measure since April of 2009.
The Golden Arches said last month that it grew overall global comps by 4.8% in its recent quarter, helped by its dollar menu and an expanded list of coffee drinks, but the figure came up short of expectations and McDonald's stock fell more than 2%, closing below $70 per share the day it released the quarterly results. McDonald's posted
for the period.
McDonald's shares have rebounded since then, hitting an all-time high of $73.33 in trading Monday. The stock traded at $71.64 Thursday morning.
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Wendy's Arby's lowered its 2010 profit outlook to a decline of 3% to 5% year-over-year, a reversal from its prior outlook for earnings growth in the low to mid single digits. Comps are expected to be flat year-over-year at Wendy's North America restaurants and negative at Arby's North America.
Earlier this week, Wendy's Arby's said it plans to open 180 restaurants in Russia over the next 10 years as the fast food chain moves to expand its global footprint. The company also recently announced deals to open 100 Arby's restaurants in Turkey, 24 Wendy's restaurants in Trinidad and Tobago and eight other Eastern Caribbean markets -- all in the next decade.
Quarterly earnings fell 4.2% to $10.7 million, or 3 cents per share, down from $14.9 million, or 3 cents per share, in the year-earlier period. Revenue fell 3.9% to $877 million. The figures missed expectations for earnings of $21.7 million, or 5 cents per share, on revenue of $886.7 million.
Elswhere in the restaurant sector Thursday, coffee-and-donuts chain
, thanks to strong same-store sales growth in its Canadian stores.
missed top- and bottom-line quarterly expectations but
( CHUX), which operates its namesake and Ninety Nine fast-casual restaurants, posted disappointing quarterly results as well.
Red Robin Gourmet Burgers
is on deck to report after the closing bell.
Wendy's Arby's Group Stock Rating Report (WEN) Rating and Financial Analysis
-- Reported by Miriam Marcus Reimer from New York.
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