Hamburger chain Wendy's International Inc. (WEN) Wednesday reported a quarterly loss, reversing a year-ago profit, after taking a $190 million impairment charge for its struggling Baja Fresh chain.

The company posted a loss of $135.7 million, or $1.20 per share, for the fourth quarter ended Jan. 2, compared with a profit of $64.7 million, or 56 cents per share, a year ago.

Wendy's shares were down 93 cents, or 2.3 percent, at $39.90 on the New York Stock Exchange.

Wendy's said a change in the way it accounts for leases would likely widen its quarterly loss by between 3 cents and 5 cents a share, but will not affect its cash flow.

Wendy's, which is following the lead of others in the restaurant industry in changing its accounting treatment for certain leases, said it will delay filing its 2004 annual report with the Securities and Exchange Commission (search) by up to 15 days until April 4 to fully account for the changes.

Excluding both the Baja Fresh (search) charge and the expected impact from the accounting change, Wendy's had a profit of 44 cents per share for the quarter. On that basis, analysts, on average, expected 45 cents. Wendy's itself had forecast a profit of between 43 cents and 46 cents per share.

Sales at company-owned hamburger restaurants open at least 15 months fell 4.3 percent as the chain has struggled in recent months with stepped-up competition from rivals McDonald's Corp. (MCD) and Burger King Corp. Same-store sales, a key retail measure, fell 4 percent at U.S. franchised restaurants.

Both McDonald's and Burger King in the last year have revamped their menus with items like meal-sized salads, helping to boost their sales. The moves have also lured customers away from Wendy's, which already sold salads.

In a bid to revitalize sales, Wendy's in recent months added fresh fruit to its menu, pulled its unpopular "Mr. Wendy" advertising campaign, and began allowing customers to forego French fries in combination meals in favor of chili, a baked potato or salad.

Also on Wednesday, Wendy's said higher prices on key ingredients like beef and tomatoes, increases legal reserves, and expenses for closing several Baja Fresh restaurants also weighed on results.

In addition to difficulties at its flagship chain, Wendy's has also been hard-hit by slower sales increases at so-called fast casual restaurants like Baja Fresh, which sell gourmet-style fare at or near fast-food prices. As a result, Wendy's said in November it would record a large write-down to reduce the asset value of Baja Fresh restaurants in Chicago, Columbus, and Nashville.

Baja Fresh, a Mexican-style chain, has been well-received in both California and in Eastern U.S. markets like Washington and Baltimore, Wendy's has said, but sales have been slower in other parts of the country.