By CANDICE CHOI, Associated Press
NEW YORK (AP) — Wendy's is still recovering from its split with Arby's.
The Dublin, Ohio-based company on Thursday said it swung to a fourth-quarter profit of $3.9 million, or 1 cent per share, compared with a net loss of $10.8 million, or 3 cents per share, last year, when it was still married with the Arby's roast beef chain.
After stripping out the effect of Arby's, Wendy's said its revenue rose 6 percent to $615 million from a year ago.
The results confirmed preliminary results released in January that also showed revenue at Wendy's restaurants open at least a year climbed 4 percent in North America, the highest in nearly eight years.
The metric is a key performance measure for retailers because it strips out the effect of newly opened and closed stores. Wendy's says higher prices and new menu items helped drive sales and traffic in the quarter.
Net income from continuing operations in the fourth quarter was flat at 1 cent per share as a result of charges associated with the Arby's breakup, which totaled $46 million in 2011.
After three years as a single company, Wendy's sold Arby's to a private equity firm last summer to focus on improving its namesake brand.
CEO Emil Brolick, who was hired in September, has said he wants to refashion Wendy's as a higher-end fast food chain by focusing on quality. Last fall, for example, Wendy's introduced its new "W'' cheeseburger line and Dave's Hot 'N Juicy burger.
Brolick has called the company's results of the past few years "self-inflicted wounds" and said the company was suffering from an identity crisis. Earlier this year, he also laid out plans to clean up stores and raise standards for employees.
The company plans to increase its capital expenditures this year to $225 million, a $78 million increase from last year. That includes money for new restaurants and remodeling of existing restaurants.
On Thursday, Janney analyst Mark Kalinowski downgraded his rating on Wendy's to "Neutral" from "Buy" on indications of weak sales in January and February at stores open at least a year.
Kalinowski said the fourth-quarter sales momentum "appears to have mostly if not completely dissipated."
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