Wendy's (NYSE:WEN) is due for its monthly comps checkup. Let's have a look.
The numbers aren't very appealing from where I sit; this press release tells a tale of declining sales results for the famous fast-food brand this past February in comparison to the same time frame one year ago. These are preliminary numbers according to the company, so keep in mind, they could change.
Same-store sales at Wendy's U.S. company stores declined by 2.4%, while the decline at U.S. franchise locations was between 0.7% and 0.9% (this compares to increases in February 2004 of 9.9% and 8.0%, respectively). The Tim Hortons brand fared much better, although the growth in comps wasn't as profound as the prior year's outing; here we see the Tim Hortons Canada segment increasing between 6.2% and 6.6%, while Tim Hortons U.S. jumped between 8.1% and 8.5% (versus year-ago results of 7.4% and 12.5%, respectively).
Wendy's indicated that the challenging weather in the northeastern part of the country dissuaded a lot of patrons from making the trek to their local joints. It has been a tough winter, no doubt, and I'm sure it did have an effect, but these comps can still be looked at on the surface for what they are -- troubling to an investor, especially after taking into account recent metrics.
Consider that same-store stats declined in October. Check out the fourth-quarter earnings report. On a GAAP basis -- which included a goodwill writedown related to the company's Baja Fresh asset -- a loss was reported; however, as Tim Beyers indicated, excluding that element, earnings still came in 16% lower than the previous year. If you read the actual release that Tim used for his article, you will also note that same-store sales for the Wendy's brand declined in the fourth-quarter as well. Synthesizing this recent snapshot of the company, I come to something of a bearish outlook right now.
McDonald's (NYSE:MCD), Sonic (NASDAQ:SONC), and Yum! Brands (NYSE:YUM) are offering quite a bit of competition for Wendy's. The company can turn things around with better marketing and savvy initiatives -- such as offering fruit and freedom of choice -- but it's in something of a stagnating period right now. We'll have to see what the rest of the year has to offer.
A greasy feast of related articles:
- Baja Humbug at Wendy's
- McDonald's Isn't Chicken
- Grimacing Over McDonald's Payout
- Fast Facts on Fast Food
- Milkshakes Better Than Yours
- Is Wendy's a Wallflower?
Also check out the Wendy's discussion board. The Fool Community is a lot of fun, and it is chock-full of members who sometimes throw out some interesting stock ideas.
Fool contributor Steven Mallas owns none of the companies mentioned.
