While Wendy's
While the raw numbers do show signs of improvement, as the company posted earnings of $0.33 compared to a loss of $0.25 in the previous year's quarter, a closer examination reveals something different. Last year's figure includes a $0.54 charge to write down the value of its Baja Fresh Mexican Grill business.
Revenue was flat from a year ago, at $633 million. This comparison does not include the Tim Hortons
New menu items, such as the Frosty Float and Steakhouse Double Melt cheeseburger, were credited with boosting sales, and management seems to have a bright outlook for the company, as it plans to offer more of these new and innovative menu items. The company is proud of its new advertising campaign after positive consumer feedback from the "That's Right" commercial. Apparently, more than half of the respondents they researched could recite the "I deserve a hot, juicy burger" line. But of course, a catchy slogan won't bring in the customers by itself, and the sales figures definitely illustrate that.
Wendy's faces fierce competition. Not only does it compete with fast-food companies such as standard-bearer McDonald's
Back in April, it decided to explore its options. While many expected this to result in a sale of the company, Wendy's doesn't seem to be in any rush. Management stated there is no specific timetable for its review, and decided to end the discussion about the subject. Those looking for a quick sale may well be disappointed, although activist shareholders are clamoring for management to enhance shareholder value. Wendy's may find itself not only battling the fast-food giants, which is difficult enough, but its own investors as well.
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Fool contributor Larry Rothman is happy to receive feedback, and promises to read it when not being wrestled by his three children. He doesn't have any positions in the companies mentioned. The Fool's disclosure policy deserves a hot, juicy burger.