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 ...

Freddie Mac CEO Quitting; HSBC Selling Shares, Cutting Jobs; Wendy’s/ Arby’s Loses $390 Million in 4Q; South Africa Unemployment Fell to 21.9% in 4Q; Venture Capital Investment Plummets; Dish Network Ups Profit, Loses Subscribers

Six months after becoming Freddie Mac (FRE) Chief Executive Officer, David Moffett is stepping down from his post, citing a desire to return to the financial services industry, Reuters reported. “Whatever the reason Mr. Moffett has determined to leave, the abrupt departure with no replacement in hand is a negative indicator for the company,” said Jim Vogel, a strategist at FTN Financial Capital Markets. Europe’s largest lender, HSBC Holdings plc (ADR: HBC), said it plans to raise 12.5 billion pounds ($17.7 billion) by selling shares. The company also announced 6,100 job cuts and plans to ...

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 ...

Nelson Peltz, Chairman of Triarc (TRY), the franchisor of Arby’s restaurant chain, was able to strike a buyout deal with Wendy’s (WEN). Under the merger agreement, expected to close in the second half of the year, WEN shareholders will receive 4.25 shares of Triarc for each share of Wendy’s they own. This equates to $25.29 per share at Triarc A shares’ current price ($5.95).

Wendy’s incoming 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 consumer spending pressures.

While we think there is a lot of low-hanging fruit for initial margin improvement, the management’s 500 basis point target will in our opinion take at least two years and necessitate

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