Wendy’s/Arby’s Group, Inc. (WEN) – Bear of the Day
Source: http://www.zacks.com/commentary/11004/Wendy%27sArby%27s+Group%2C+Inc.+%28WEN%29+-+Bear+of+the+DayPosted on Wednesday, May 27th, 2009 | In Market Commentary, Stocks to Watch
Wendy’s (WEN) new management team, led by Arby’s CEO, have outlined what we think is a viable, albeit multi-year turnaround plan that includes improving margins, reinvigorating the brand, revitalizing comps, and expanding internationally.
However, Wendy’s turnaround efforts come at a difficult time for the industry, which faces rising input costs and a deepening recession. Arby’s, which serves pricier food, is being particularly hard hit, with comps falling 8.7% in 1Q09.
While we think there is a lot of low-hanging fruit for initial margin improvement, management’s $100 million annual incremental store-level operating profit target will in our opinion take at least two years and necessitate executing on many levels.
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