Wendy's scores with new strategy
Better times lie ahead for the burger chain.
When Wendy's (WEN) CEO Emil Brolick was hired last year, the burger chain was in the midst of an identity crisis. That's no longer the case.
The company made famous in folksy commercials featuring its late founder Dave Thomas has moved into the lucrative fast casual market with premium offerings such as the W burger. Brolick is also sprucing up the chain's locations and stressing the importance of good service. Though he took the job only in November, he is already seeing results.
Revenue in the last three months of 2011 gained 5.6% to $615 million, surpassing the $613 million predicted by analysts, though income from continuing operations fell 30% to $4.3 million. Same-store sales in North America rose 4.4% -- the chain's best performance in eight years -- helped by the popularity of offerings such as the revamped Dave's Hot 'N Juicy cheeseburger. Skeptics are clearly coming around.
For instance, the blog GrubGrade gave a positive review to the W burger, saying, "I didn't love it by any means -- and God knows I probably put something tastier in my mouth that very day, much less the entire year -- but I honestly enjoyed it for what it was."
Investors have also liked what they've been seeing. Shares are up nearly 7% over the past year, outperforming McDonald's (MCD), which eked out a gain of 1.53% during that same time. Earnings per share are expected to hit 18 cents this year and 24 cents next year, which would be a significant improvement from the 14-cent level Wendy's has earned for the past three years. Corporate insiders are also loading up on shares.
The one negative on Wendy's stock is that analysts have a one-year price target of $5.55, which is about where it trades now. If the company continues to improve, those figures will be adjusted.
Jonathan Berr is a freelance business writer. He owns shares of McDonald's.
This is considered a positive review? Seriously?
It's always been [and always will be] Wendy's burgers, McDonald's fries... Frosty notwithstanding. And I do agree with "Someone" to an extent, the new fries definitely taste better, but the old ones? you literally couldn't give those to homeless people on the streets who were staving. The were gross.
Post the response, Gunnar... because I do not believe you.
First of all, they would not have responded, "... you must 'of' had the flu..." the word is HAVE... you must HAVE had the flu... HAVE, not OF, HAVE.
But, believe this about Wendy's... they did this $1 promotion... donate a dollar to their charity, buy a key-ring Frosty amulet and you will get a small Frosty free for the entire year.
Guess what... THEY DON'T HONOR those amulets!
What's that all about?
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.