Wendy's Cuts Forecast Amid Hurricanes, Rising Beef Price

Restaurant operator Wendy's International Inc. (WEN) on Tuesday cut its 2004 earnings forecast, citing hurricanes, higher legal reserves, costlier beef and challenges at its Baja Fresh (search) Mexican Grill chain.

The Dublin, Ohio-based fast-food restaurant operator said it expects 2004 earnings per share to range from $2.25 to $2.30, versus its previous forecast of $2.32 to $2.37.

The latest forecast reflects a 10 percent to 12 percent increase over 2003 earnings of $2.05 per share.

Wendy's said it expects third quarter earnings per share to range from 59 cents to 60 cents, noting the recent spate of harsh hurricanes hurt sales and profits at restaurants throughout the Southeast and Gulf Coast (search).

It said it has lost more than 2,000 store days so far in the third quarter due to closed restaurants, mandatory evacuations and power outages. Additionally, customer traffic was hurt by heavier-than-normal rain following the hurricanes.

Same-store sales for the month period ending Sept. 20 are running about down 1 percent compared to a year ago, which is lower than expected. Same-store sales for that period in 2003 rose 3.5 percent.