Wendy’s president quits as sales falter
Wendy’s International Inc.’ s Tom Mueller, who served as president and chief operating officer since 2000, resigned after the Number 3 U. S. hamburger chain posted its smallest quarterly sales gain in six years in July.
Chief executive Jack Schuessler will take over for Mueller, 53, on an interim basis, the Dublin, Ohio- based company said yesterday. Schuessler said he will manage the flagship business and try to reinvigorate sales growth while the company looks for a replacement.
Sales at Wendy’s owned restaurants open more than a year dropped for three consecutive quarters, including a 4.6 per cent second- quarter decline, hurt by competition from Number 1 McDonald’s Corp. In July, the company cut its annual profit forecast.
“ We believe Tom’s departure is an indication of deteriorating two- year sales trends, and decreasing support within the franchise community,” wrote UBS Securities analyst David Palmer, who has a “ neutral 1” rating on the stock. “ Sales trends have worsened in recent months when easier sales comparisons are considered, and we believe September has been ugly to date.” The company didn’t give a reason for the departure of Mueller, who was responsible for Wendy’s North America and international units. He joined the company in 1998 as senior vice- president of special projects following 24 years at Burger King Corp.
Mueller didn’t immediately respond to a message left at his office. Wendy’s in late July announced plans to offer a stake in its Tim Hortons doughnut chain to the public and to close or sell about 450 hamburger restaurants.
Shares of Wendy’s fell $ 1.05 ( U. S.), or 2.2 per cent, to close at $ 46.27 in New York Stock Exchange trading. Before yesterday, they had risen 21 per cent this year. Wendy’s has been hurt by negative publicity after a woman claimed she found a finger while eating a bowl of chili in a San Jose, Calif., restaurant. The finger incident, which was a hoax, reduced sales in the second- quarter by as much as 2.5 per cent.
Shares of Wendy’s have risen half as much as McDonald’s in the past two years as profit growth tumbled. McDonald’s has had more than two years of sales gains.