Wendy’s International Inc. announced Wednesday that it has created a special committee of directors to consider a possible sale of the company, among other options.
The nation’s third-largest hamburger chain said it does not intend to make periodic announcements regarding the strategic review, which it said could mean a possible sale, merger or other business combination. Wendy’s will report developments as warranted, the company said.
“There is no specific timeframe to complete the review and there are no constraints on options to be explored by the committee,” said James V. Pickett, board chairman, who will lead the committee of independent directors.
“A number of stakeholders have offered suggestions about strategies to improve performance and create additional value. The special committee will review strategic options while management continues to focus on executing Wendy’s current strategic plan to revitalize the brand and improve results at every restaurant in the system.”
Billionaire investor Nelson Peltz’s Trian Partners, which has pushed Wendy’s to make changes, received three seats on the board last year.
Wendy’s also reported Wednesday that net profit fell 71 percent in its first quarter. It earned $14.7 million, or 15 cents per share, in the period ended April 1, down from $51.2 million, or 45 cents per share, in the same period a year ago, when the company was larger.
Revenue was $590 million, up 2 percent from $579 million a year ago.
Analysts surveyed by Thomson Financial had expected, on average, a profit of 13 cents per share on revenue of $592 million. The Wall Street estimate had fallen from 19 cents per share after Wendy’s said last month that it expected to make 11 to 14 cents a share for the quarter.
Wendy’s completed the spinoff of Tim Hortons in September and sold its Baja Fresh Mexican Grill chain in November. Since then, it has refocused on its core burger business.
The company finished the quarter with 6,658 restaurants, 15 fewer than at the end of 2006.
“With sales momentum heading in the right direction, management must now deliver on its promise to cut $100 million in costs and launch a national breakfast menu, both of which will be very challenging,” A.G. Edwards & Sons said in a recent report.
The company’s results were released after the market closed Wednesday. The shares rose 58 cents per share, or 1.8 percent, to close at $32.68 on the New York Stock Exchange, then gained $4.12, or 12.6 percent, in extended trading to pass the stock’s 52-week high. Shares have been trading from $26.35 to $35.95 in the past year.
Wendy’s, based in the Columbus suburb of Dublin, trails McDonald’s Corp. and Burger King Holdings Inc. in the burger business.