The sale of its struggling Arby's chain showed that Wendy's was looking to deleverage its balance sheet and finally divest a brand that's been dragging on its financials for years. Wendy's CEO Roland Smith said Tuesday that "we are pleased to retain an 18.5% common stock interest in the Arby's business."
"With the transaction now behind us, we look forward to devoting our full attention and resources toward realizing Wendy's exciting growth prospects, which include revitalizing the core menu, expanding into new dayparts including breakfast, modernizing our facilities, building new restaurants in the United States and pursuing global expansion," Wendy's Smith said.
The merger of Wendy's and Arby's occurred in 2008 under Chairman Nelson Peltz's leadership, and the company had tried to reinvigorate the brand -- most recently with a new advertising campaign labeling Arby's menu as "good mood food" -- but a meaningful turnaround had yet to materialize. Roark certainly faces headwinds as it takes on the Arby's brand, perhaps most notably in the area of rising ingredient costs which have hit a roster of food and beverage companies across the sector from Kraft Foods ( KFT) and Kellogg ( K) to Jack in the Box ( JACK) and Panera Bread ( PNRA).
Wendy's shares were 0.4% lower at $5.17 in the first minutes of trading Tuesday. -- Written by Miriam Marcus Reimer in New York. >To contact the writer of this article, click here: Miriam Reimer. >To follow the writer on Twitter, go to http://twitter.com/miriamsmarket. >To submit a news tip, send an email to: email@example.com.
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