Anyone who lived through the mid-'80s likely remembers the famous Wendy's (NYSE:WEN) commercials where 84-year-old Clara Peller complained about the burger sizes at competing fast-food restaurants, asking, "Where's the beef?" These days, Wendy's management is probably asking the same question as soaring beef prices continue to take a bite out of the bottom line.

Yesterday, the nation's No. 3 hamburger chain posted a 4.2% rise in third-quarter net income to $69.1 million ($0.60), on a 13.3% jump in revenues to $914 million. While the record high results were in line with estimates, Wendy's was quick to warn that difficult times lie ahead, lowering its outlook for the second time in less than a month. Full-year earnings guidance, which was originally $2.32 to $2.37, has been trimmed back to $2.19 to $2.25.

In the third quarter, beef prices jumped 12% from year-ago levels to $1.31 per pound and are expected to climb even further in the current quarter to $1.39. Commodity prices in general have been a frequent cause of complaints, singled out by casual diners such as Outback Steakhouse (NYSE:OSI) and Lone Star Steakhouse (NASDAQ:STAR) in their latest quarterlyreports.

Same-store sales at Wendy's company-owned units grew 2% for the quarter but are tracking 6% lower thus far in October. Tim Horton's coffee and bakery outlets continue to pave the way, with comps climbing 8.4% in Canada and 9.8% domestically. Same-store sales at Baja Fresh, however, declined 7.5% (after falling 4.1% last year), driving EBITDA to a $1.6 million loss. Wendy's is currently undergoing efforts to redefine the concept.

While Wendy's results are respectable given high food costs, hurricane-related expenses, and other problems, they lag rivals such as McDonald's (NYSE:MCD), who recently reported a 42% jump in net income, driven by a 7.6% improvement in global same-store sales. The week before, Sonic (NASDAQ:SONC) announced that earnings were up 17%, with comps ahead 8.8%, the largest gain in the last five years.

Wendy's is facing some short-term challenges, but whether it is drive-through order screens, innovative menu options, electronic payment availability, quality ingredients, or quicker service, the company always seems to be a step ahead of the competition. Wendy's drive-through, for example, is a case study in efficiency and has been rated No. 1 for six straight years by an independent source. In a game where speed and accuracy are essential, this provides a competitive advantage for the company that, at only 13 times forward earnings, trades at a discount to many of its peers.

Fool contributor Nathan Slaughter rarely eats fast food but must admit that a Wendy's spicy chicken sandwich sounds tempting. He owns none of the companies mentioned.