This time last year, Wendy's
In 2006's fourth quarter, same-store sales registered about a 3% increase (3.1% at company-owned stores and 2.7% at franchised units). The company is clearly building momentum in the right direction, as each month of the quarter saw improved sales growth over the same month in 2005.
Wendy's management credits promotional menu items and improvement in operations, such as friendliness and speed of service. Yet those are easier said than done. I know that McDonald's
Looking over what Wendy's has done over the past year, it is the closing of under-performing stores, re-franchising of company-owned stores, and slowed new-restaurant development that helped management focus more on running a tight ship rather than growth purely for growth's sake. New products are great for bringing in customers, but as a long-term investor, what you really want to see are more structural changes. Frescata sandwiches will only produce a temporary spike in sales if customers are turned off by slow or rude service. Refranchising stores, however, usually results in improved service, since franchisees have a huge incentive to make sure their stores perform.
Looking to the future, challenges to continued sales growth are waking up with the roosters as Yum! Brands'
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Fool contributor Jason Ramage holds no financial interest in the companies mentioned here.