Wendy's shares rise after scales back breakfast plans

Wendy's/Arby's shares rose more than 3 percent in early trading.

The company is also working on improving margins at its Wendy's restaurants, said Roland Smith, president and CEO of Wendy's/Arby's, who also serves as CEO of the Wendy's brand.

Wendy's/Arby's was formed when Triarc, the owner of the Arby's sandwich chain, acquired Wendy's International Inc for $2.2 billion on September 29.

Smith, speaking at a Cowen and Company conference, said the company expects to grow EBITDA by $100 million and cut costs by $60 million over three years.

Smith said Wendy's would focus on the Pittsburgh, Kansas City and Phoenix markets this year with a revamped breakfast menu. After testing its plans, it aims to relaunch breakfast nationally in 2011.

In a slide for Smith's presentation, Wendy's/Arby's said it would reduce the number of Wendy's locations selling breakfast to between 450 and 475, down from 850.

The move is a sharp contrast to the pre-merger plan Wendy's laid out in 2007. At that time, Wendy's added breakfast to hundreds of U.S. locations as a key initiative to revitalize its business.

McDonald's Corp , the leading fast food chain, has credited its breakfast business for helping boost sales in the United States.

In the past, Wendy's breakfast offerings have included a Steak and Egg sandwich, a Grande Breakfast Burrito, and a Buttermilk Frescuit -- a type of biscuit made with egg, cheese and bacon.

Fourth-quarter results for the combined company will be released on March 5. In November, Wendy's/Arby's posted quarterly losses for each of its former companies.

Wendy's/Arby's shares gained 19 cents, or 3.7 percent, to $5.29 in early New York Stock Exchange trading.

(Reporting by Jessica Wohl; Editing by Derek Caney and Maureen Bavdek)