In announcing its third-quarter results, Wendy's said it is investing $12 million for a 25% stake in the Pasta Pomordoro fast-casual Italian chain. The 24-unit chain is concentrated in Bay Area of California and seats an average of 75 people with an average tab of $9 at lunch and $14 at dinner.
"Pasta Promodoro fits very
In May, Wendy's acquired the 191-unit Baja Fresh fast-casual Mexican chain for $275 million. In February, not long after the death of Wendy's founder, Dave Thomas, the company bought Southwest-based upscale bistro chain Cafe Express for $10 million.
Net income surges
For the third quarter ended Sept. 29, Dublin, Ohio-based Wendy's International, owner of hamburger restaurants Wendy's and donut chain Tim Horton's, reported net income surged 16.3% to $60.9 million, or 52 cents per diluted share. Sales at company-owned stores open at least a year grew 5% at Wendy's, 5.8% at Tim Horton's Canada and 8.8% at Tim Horton's U.S.
While aggressive discounting programs launched during the quarter by larger rivals McDonald's Corp. and Burger King Corp. haven't boosted sales significantly, Wendy's, the No. 3 burger chain, credited its 13-year-old 99-cent Super Value Menu for driving July and September sales.
Wall Street not impressed
Despite Wendy's strong performance, it wasn't enough to keep Wall Street happy. Shares tumbled today to $32.65 after Wendy's met analysts' earnings expectations but didn't beat them.
"It appears that at least some investors were disappointed that the company didn't report a little better earnings considering continuing strong sales trends," said Alan Hickok, restaurant analyst with U.S. Bancorp Piper Jaffray.
Wendy's ended trading today at $32.94, nearly 4% off Wednesday's close of $34.30.