Summary Wendy's profit came above Wall Street expectations and it's selling 425 of its franchises.
NEW YORK (AP) - Wendy s reported a quarterly profit that came in above Wall Street expectations and said it s selling 425 of its restaurants to franchisees.
Fast-food companies often own only a small percentage of their restaurants. This fattens their profit margins by reducing operating costs and lets them instead rely on fees paid by franchisees.
Wendy s Co. says the sale of its restaurants will reduce its ownership to 15 percent of its locations, from 22 percent.
It said it now expects long-term adjusted earnings-per-share growth in the mid-teens percentage range starting next year. Previously, it had forecast single-digit to double-digit growth.
The company, based in Dublin, Ohio, also raised its dividend by 25 percent to 5 cents per share. Its stock shot up 8 percent to $7.21 in premarket trading.
CEO Emil Brolick said in a statement that the restaurants sale is intended to help expand the adoption of new restaurant designs among franchisees.
That renovation, which features a more modern, inviting look, is part of the company s push to recast itself as a higher-end fast-food chain.
For the quarter, Wendy s Co. says sales edged up 0.4 percent at restaurants open at least a year. McDonald s on Monday said its sales rose 1 percent in the U.S., noting that people were being careful about eating out.
Wendy s says it earned $12.2 million, or 3 cents per share. That compares with a loss of $5.5 million, or 1 cent per share, a year ago.
Not including one-time items, it earned 8 cents per share, more than the 6 cents per share Wall Street expected.
Revenue rose to $650.5 million, short of the $659.5 million analysts expected.
