Wendy's International hamburger chain reported Monday that fourth-quarter profit rose 54% from a year ago despite lower sales and tough competition in the fast-food industry. The Dublin, Ohio-based chain said income for the quarter rose to $6.75 million on revenue of $258.7 million from income of $4.37 million and revenue of $259.3 million in the same period for 1987.
For the year, profit was up sharply at $28.5 million, compared to $4.5 million in 1987. Revenue for 1988 rose slightly to $1.063 billion from $1.059 billion.
The improved profit was the result of lower costs for beef and produce as well as efforts to control expenses, the company said its earnings report. Wendy's obtains most of its produce from Southern California, where prices were not driven up as high by the 1988 drought as in other farming regions. The cost-control effort also was aided by about 500 layoffs in Wendy's 40,000-member staff, which occurred in 1987, the company said. Profit margins at company restaurants rose to 11% last year, compared to 8.3% in 1987.
Robert L. Barney, Wendy's chairman and chief executive, said discount pricing in the first month and a half of 1989 signal another highly competitive battle among chain restaurants.
At year's end, there were 3,762 Wendy's Old Fashioned Hamburgers restaurants worldwide, including 1,173 operated by the company.