narrowed its quarterly losses as revenue grew and said it will raise prices to help offset
rising commodity costs.
Wendy's Arby's also lowered its 2011 guidance for earnings before interest, taxes, depreciation and amortization to a range of $330 million to $340 million, from its prior outlook for EBITDA of $345 million to $355 million. Analysts' consensus had been for Wendy's to book full-year EBITDA of $401.7 million.
Wendy's Arby's shares fell sharply at the opening bell Tuesday, but pared their losses and traded 1.5% higher at $4.89 nearly 90 minutes into the trading session.
Wendy's Arby's said commodity costs continued to rise, a sentiment shared by a roster of food and beverage companies from
( SLE) and
CEO Roland Smith said that despite those costs, Wendy's "reaffirmed our same-store-sales outlook and expect to offset some of these commodity increases with prudent price increases, while protecting transactions and market share."
Same store sales -- or sales at stores open at least one year, a closely watched metric in the restaurant industry -- in the recent quarter rose 0.3% at Wendy's franchised North American restaurants. At Arby's, which the company hopes to divest, total same-store sales rose 5.5%, a good sign in terms of turnaround efforts the company has undertaken to improve performance at the struggling chain.
In the recent quarter, Wendy's Arby's lost $1.4 million, or break-even on a per-share basis, compared with a year-earlier loss of $3.4 million, or a penny loss per share. Adjusted for one-time items, the company would have earned a penny per share in the period ended April 3, lower than the 2 cents per share analysts had expected.
Total revenue rose 1.2% to $847.8 million, from $837.4 million, but top-line results also came up short of expectations for sales of $819.6 million.
-- Written by Miriam Marcus Reimer in New York.
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