Wendy’s Says Bogus Accusation Hurt Sales

Wendy’s International Inc. said Thursday that quarterly sales at restaurants fell 4%, hurt mainly by a false claim of a finger being found in a bowl of chili.

It marked Wendy’s third consecutive quarterly decline. The company said half the sales decline for its second quarter ended July 3 was due to the claim.

Authorities have charged a Las Vegas resident with making up the story in March in an attempt to extort money from the hamburger chain, the nation’s third-largest.

“We expected second-quarter results to be challenged ... but this is somewhat lower than expected,” Banc of America Securities analyst Andrew Barish wrote in a report Thursday.

Sales at company-owned restaurants open at least a year fell 4.6% for the quarter, and same-store sales at franchised restaurants slipped 3.9%. Sales took the worst hit in April, with the decline narrowing in May and June.

Wendy’s, based in Dublin, Ohio, said sales also were hurt by difficult comparisons with the year-earlier period and beef prices that were 24% higher.

Wendy’s introduced new advertising in late May to try to reverse the revenue slide. It had pulled its unsuccessful Mr. Wendy’s campaign in November after it failed to generate sales gains.

“Wendy’s sales a year ago were strong, and we are still recovering from the San Jose incident, especially on the West Coast,” Jack Schuessler, Wendy’s chairman and chief executive, said in a statement.

Sales at Wendy’s Tim Hortons coffee and doughnut chain jumped 5.6% in Canada and 9.1% in the United States, helped by chicken club sandwiches, iced cappuccinos and yogurt and berries.

Shares of Wendy’s rose 57 cents Thursday to $46.95. The company will release second-quarter earnings July 28.

Associated Press and Bloomberg News were used in compiling this report.