Feb. 4 (Bloomberg) -- Wendy's International Inc., the U.S. hamburger chain that's been seeking a buyer since April, said fourth-quarter profit rose less than analysts estimated as sales dropped at restaurants open at least 15 months.

Wendy's fell 5 percent in New York trading as executives said today that full-year profit may trail analysts' projections on higher costs for beef and chicken. The restaurant chain didn't provide an update on a possible sale.

Sales at company-owned locations decreased for the first time in seven quarters after Frescata deli-style sandwiches and a new marketing campaign failed to lure customers. Wendy's and McDonald's Corp., which posted unchanged U.S. sales in December, have struggled as consumers cut back on spending because of gasoline prices near $3 a gallon and declining home values.

``The problem they face, and again now we've even seen it in McDonald's numbers, is trying to get same-store sales up,'' said Ron Paul, president of Chicago-based restaurant consultant Technomic Inc. ``A lot of the emphasis is going to be on lower- priced value products, which is going to make it hard to get store sales up.''

Net income more than quadrupled to $14.1 million, or 16 cents a share, from $3.03 million, or 3 cents, a year earlier, Dublin, Ohio-based Wendy's said today in a statement. Revenue declined less than 1 percent to $596 million

Earnings in 2008 before interest, taxes, depreciation and amortization will be at the low end of analysts' estimates that range from $324 million to $358 million, Chief Financial Officer Jay Fitzsimmons said on a call with analysts and investors.

``The first part of 2008 looks challenging due to economic headwinds and rising commodity costs,'' Chief Executive Officer Kerrii Anderson said on the call.

Share Performance

Wendy's declined $1.25 to $23.93 at 4 p.m. in composite trading on the New York Stock Exchange. The shares have dropped 28 percent in the past year through today.

``People are concerned about what the real value is, and how difficult it's going to be to really get Wendy's back on solid footing and grow it again,'' said Paul.

The restaurant company earned 21 cents a share, excluding expenses to consider its strategic options. Lower salary and restructuring costs, as well as a decrease in the tax rate, helped boost profit. Wendy's also increased prices as chicken and paper expenses rose.

Seven analysts estimated average quarterly profit of 24 cents a share at Wendy's. Four projected sales of $592.5 million.

Commodity Prices

``We continue to see commodity price increases in 2008, which we plan to offset with menu price increases and further costs reductions,'' Fitzsimmons said.

Wendy's sees beef costs climbing 3 percent to 4 percent in 2008 and chicken costs rising 5 percent to 8 percent, Fitzsimmons said.

McDonald's, the world's largest restaurant company, reported Jan. 28 that December's U.S. sales at restaurants open at least 13 months were unchanged, the worst monthly performance in almost five years. It blamed colder weather and sluggish consumer spending. For the quarter, the maker of Big Macs said same-store sales rose 3.3 percent.

``We are starting this year with a very low momentum in sales,'' Fitzsimmons said.

Burger King

In contrast, Burger King Holdings Inc., the second-largest U.S. hamburger chain, said last week that second-quarter profit rose 29 percent as discount menus and late-night hours attracted customers. The company introduced the fast-food industry's first discount breakfast last year and extended store hours until midnight or later at its U.S. restaurants.

Revenue slumped at Wendy's following the death of founder Dave Thomas in January 2002, with sales at older stores dropping six quarters in a row before former CEO Jack Schuessler resigned in April 2006. He was replaced by Anderson.

Wendy's said in December that Chief Marketing Officer Ian Rowden resigned and last week said that it was stopping its ``red wig'' advertising. A new marketing campaign, called ``Waaaay Better,'' will focus on the company's ``quality food.''

The company formed a committee in April to explore a sale after billionaire investor Nelson Peltz urged management to boost profit and reduce expenses. The company said last week that it's in the ``final stages'' of the review.

Peltz's Trian Fund Management LP is the company's largest shareholder, while his Triarc Cos., the owner of the Arby's fast-food chain, has offered to buy Wendy's.

U.S. same-store sales dropped 0.8 percent at company-owned restaurants and climbed 0.2 percent at franchised outlets in the quarter, Wendy's said Jan. 4.

The number of Wendy's restaurants fell to 6,645 as of Dec. 30, 2007, from 6,673 from a year earlier.

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net

Last Updated: February 4, 2008 16:21 EST