US fast food chain Wendy’s (NASDAQ:WEN) reported a 33% decrease in fourth quarter revenues as it scaled back the number of company-owned restaurants.
Revenue fell to $303.9mln in the final three months of fiscal year 2016 from $464.4mln, though it was better than the consensus of $308.4mln. Wendy’s said the drop in sales reflected the ownership of 522 less company-operated restaurants.
A total of 310 restaurants were sold to franchisees during 2016, in addition to the 227 sold in the second half of 2015. The group said it has completed its plan to reduce its company-operated restaurant ownership to about 5% the total system.
Same-restaurant sales in North America in the fourth quarter rose 0.8% from a year ago, exceeding expectations for a 0.5% increase.
However, net income fell to $28.9mln, or 11c per share, from $85.9mln, or 31c per share.
Excluding non-recurring items, adjusted earnings per share dipped to 8c from 12c, below market estimates of 9c.
Wendy’s approved a new $150mln share repurchase programme and raised its quarterly dividend to 7c per share from 6.5c.
The casual dining sector in the US has been affected by less people eating out as higher minimum wage requirements have pushed up prices. It has also become cheaper for Americans to dine at home as supermarkets have passed on lower food costs onto is customers.