"While a sale remains only one of the alternatives under consideration, we believe it merits more thorough examination," says James V. Pickett, Wendy's chairman, in a statement. Management has given no timetable for the sale of the business. It has hired JP Morgan, as lead adviser, and Lehman Brothers as a co-adviser for the process.
Wendy's executives are also lowering the company's earnings-per-share guidance for the year from $1.26 to $1.32 per share to between $1.09 and $1.23. The downturn is due to lower-than-expected, same-store sales. During the first quarter, which ended April 1, same-store sales rose 3.8% year over year, while they have only come in at a 0.7% pace in the current quarter.
Kerri Anderson, the company's chief executive officer and president, says that the lower same-store sales are due to menu prices cuts that the company has instituted to "bring Wendy's more in line with the market." Executives hope these cuts will improve long-term margins.
At the end of its first quarter, Wendy's operated 6,658 restaurants internationally. Management anticipates 65 to 90 new-unit openings this year and as many closures.
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