Wendy's has been in a slump for quite some time and the board is considering selling the company to the highest bidder.
The Dublin, Ohio, company said yesterday that its board formed a special committee of independent directors to investigate all strategic options for Wendy's. The company said the committee is weighing a possible sale, merger or other "business combination," and contemplating changing Wendy's strategic plan and capital structure. Chairman James V. Pickett will lead the committee. There has been previous speculation that Wendy's could be sold.
The Wendy's board review could make it more difficult for Chief Executive Kerrii Anderson to rally investors around the turnaround plan she has been pushing for the past year. Ms. Anderson has made numerous presentations to Wall Street touting Wendy's new strategy of stronger marketing, more new products, sharper store operations and better relationships with the franchisees who own Wendy's outlets. Her changes have helped lift Wendy's same-store sales, a key measure of the company's performance.
But Wall Street is concerned that her growth targets may be overly optimistic, and that the plan relies on succeeding in areas where Wendy's has failed before. For instance, executives have pinned some of Wendy's projected sales growth on a new breakfast menu that Wendy's wants to have in more than half of its North American locations by next year. Wendy's tried a breakfast menu in the 1980s and it flopped.
Wendy's said its first-quarter net income fell 71% to $14.7 million. Revenue rose 2%.
