Wendy's Adapts with Value Offerings, Arby's Lags Lean TimesThe sinking economy necessitates that restaurants adapt to survive. First quarter financial results at Wendy's/Arby's Group Inc. (WEN) indicate Wendy's is adapting well to the lean times, attracting cash-squeezed consumers with a "Value Trio" of 99-cent sandwiches, while Arby's $5.95 bundling value packages is driving them to cheaper fare at McDonald's (MCD), Taco Bell -- a Yum Brands Inc. (YUM) concept, and Jack in the Box Inc. (JACK).Wendy's/Arby's Group, formed in September through the merger of Arby's parent, Triarc, and Wendy's, reported that 1Q09 system-wide same-store sales at its Wendy's fast-food hamburger chain rose 1.0%, but fell 8.7% at the pricier Arby's roast beef take-out chain. Wendy's comps would have been stronger, but 300 of its units stopped serving breakfast.Excluding one-time charges, 1Q09 EPS was $0.01, missing our estimate of $0.04 ...

It is the best of times and worst of times for Wendy's/Arby's (WEN). Fourth quarter financial results indicate the sinking economy is driving value-seeking consumers to Wendy's and away from Arby's. Wendy's/Arby's, formed in September through the merger of Arby's parent, Triarc, and Wendy's, reported that 4Q08 same-store sales at its Wendy's fast-food hamburger chain rose 3.7%, but fell 8.5% at the pricier Arby's roast beef take-out chain.Excluding one-time charges, 4Q08 EPS was $0.05. Massive impairment charges at Arby's and other non-recurring charges totaling $0.89 per share after-tax pushed EPS to a loss of $0.84 for 4Q08.Adjusted EBITDA grew 30% year-over-year to $74 million, and EBITDA margin expanded by 270 basis points to 12.3% from 9.6% in 4Q07, as management began to wring G&A overlap from the system post-merger and squeeze labor savings at Wendy's through a new scheduling system.Management expects positive ...