Shares of Atlanta-based Wendy's/Arby's Group rose the most in more than a year Thursday after the company said it expected the Wendy's brand to grow next year.
Shares rose 36 cents, or 7.6 percent, on the New York Stock Exchange, adding about $150 million to the company's market value.
The fourth-quarter financial results were consistent with preliminary numbers the company posted in late January. But the performance of Wendy's restaurants in February apparently caught Wall Street's eye. Sales were up and the company said it expected to produce flat to positive sales in the first quarter at Wendy's restaurants open at least a year.
Sales at Arby's restaurants also rose in February, and the company said the chain would deliver a "strong" sales increase in the first quarter.
"We have seen a significant change in trend in February," chief executive Roland Smith said during a conference call with analysts. "We think that will continue through March."
The company said more consumers bought its fries after it introduced sea salt fries. The company is also attracting more people looking for value meals.
In the second half of the year, Wendy's plans to roll out "Dave's Hot ‘n Juicy Cheeseburgers," named after company founder Dave Thomas and made with beef that is 40 percent thicker, in the second half of the year. It also plans to have a new breakfast menu in 1,000 restaurants by the end of the year. In March, it will introduce a fish-and-chips combo featuring a cod sandwich.
The company said it would add about 20 company-operated Wendy's restaurants in North America this year, along with 45 franchise units. Executives predicted sales would rise 1 percent to 3 percent at established company-operated Wendy's restaurants in North America.
That number "seems achievable," said Sara Senatore, an analyst at Sanford C. Bernstein. But commodity costs have risen, with the company warning that beef costs could rise 15 percent at Arby's this year. That makes wider profit margins harder to achieve, Senatore said.
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