Wendy’s: Five Consecutive Months of Increases in Same-Store Sales

Date: NOV 9th, 2006

Topic: Franchise News

Wendy'''s Restaurant Chain (NYSE:WEN) recently announced positive monthly same-store sales for the October period ending Sunday, November 5, 2006. Preliminary October same-store sales at Wendy's company-operated locations were 1.8% compared to negative 2.1% in October 2005. Same-store sales at Wendy's franchised restaurants were 0.8% compared to negative 1.0% in October 2005.

Same-Store Sales Summary for October
In October Wendy’s promoted its 99-cent junior bacon cheeseburger and crispy chicken sandwich. This compares to promotion of the Bacon Mushroom Melt n in October 2005, which had a significantly greater positive impact on the average sale.

'We are pleased to have produced our fifth consecutive month of positive same-store sales in October, despite more challenging 2005 comparable sales than we have faced since January,' said interim Chief Executive Officer and President Kerrii Anderson. 'We are confident that our strong November promotional calendar will result in strengthening sales trends.'

New products and gift cards to be promoted in November and December

Wendy's is promoting its new Double Melt cheeseburgers in November that feature fresh ground beef patties layered with melted cheese and fresh toppings. The Company has also introduced a Wendy's gift card program for the first time.

In December Wendy's will reintroduce its Chicken Club, featuring a chicken fillet, natural Swiss cheese, bacon, mayonnaise, tomato and lettuce on a Kaiser roll.

The Company anticipates that its fourth-quarter beef costs will be approximately 4% lower in 2006 than in the fourth quarter of 2005, and expects to see $5 million to $6 million in interest income relative to the fourth quarter of 2005.

The Company also anticipates that it will incur additional expenses in the fourth quarter, including $4 million to $8 million in pretax charges for the closure of Wendy's restaurants and approximately $3 million in pretax expense for research and development related to its new breakfast trial. In addition, the Company expects to record higher expense for incentive related compensation in the fourth quarter of 2006 corresponding to anticipated improved operating results compared to 2005.