DUBLIN, Ohio (AP) — Analysts will scrutinize Wendy's Co's fourth-quarter earnings report, due out before the market opens Monday, for hints about the burger chain's game plan for growth.
WHAT TO WATCH FOR: Wendy's is remodeling, and investors will want details about the niche it plans to carve out. The chain separated itself from roast-beef purveyor Arby's last summer, hinting at the time that Arby's had dampened the larger company's sales. Now that it's free of the Arby's burden, Wendy's is under pressure to show strong revenue growth.
Emil Brolick, who became CEO in September when Wendy's pulled him over from Yum Brands Inc., will expand his role as Wendy's public face, meeting investors in New York a few hours after earnings are released.
So far, Brolick has said his strategy is to attract customers who want a higher-end fast food experience, competing with growing "fast-casual" burger chains like Five Guys and Smashburger. To that end, Wendy's has been revamping its entire menu, from its fries and salads to is burgers and chicken sandwiches.
The chain has also been tweaking its approach to pricing. Wendy's previously took a "barbell" strategy, meaning it focused on high-end and low-end offerings. But at the time of the last earnings report, it added a mid-tier cheeseburger it called the "W," which costs about $3. That's about halfway between the 99-cent "value" cheeseburger and the Dave's Hot 'N Juicy burger, which can cost nearly $6. And it aligns Wendy's more directly against much-larger rival McDonald's, which offers premium, core and value items.
EXPECTATIONS: Analysts are predicting revenue of $613 million and adjusted earnings of 4 cents per share, according to FactSet.
LAST YEAR: Wendy's revenue was $583 million in the fourth quarter a year ago. With Arby's, its adjusted earnings amounted to a penny per share, excluding one-time charges like costs of combining the two companies, advertising for breakfast at some Wendy's locations and paying down debt. (Including those charges, the company lost 3 cents per share.)
