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Rising Food Costs Are Manageable: Wendy's CEO

Wednesday, 16 Jan 2013 | 7:22 PM ET
Wendy's CEO Explains Quarter
Emil Brolick, CEO of Wendy's, offers insight on Wendy's earnings, the economic environment and more.

Rising food prices look manageable this year and Wendy's doesn't expect have to raise menu prices much, CEO Emil Brolick told CNBC's "Closing Bell" on Wednesday.

"In 2012, we basically saw a 90 basis point increase in commodities," the hamburger chain CEO said. "As we look at 2013, we're looking for something in the area of 90 to 120 basis points. We have already built this into the outlook for the year, so we think it's a manageable increase."

Rising chicken and beef prices will be the primary driver of higher food costs this year.

Earlier, Chipotle Mexican Grill warned that higher food costs will bite into earnings growth in the fourth quarter. Chipotle said in a press release that food costs are expected to be about 33.5 percent of sales, an increase of 130 basis points from last year.

Wendy's doesn't expect to have to hike menu prices to offset higher beef and chicken costs. "We've not assumed a lot of price increases next year," Brolick said, citing the "very competitive environment" in the restaurant industry where it competes with McDonald's and Burger King.

(Read More: Here's One Way to 'Blow Up' the Fast Food Industry)

The burger chain also reported better-than-expected preliminary earnings of 8 cents per share, excluding items, on revenue of $629.9 million for the fiscal fourth quarter.

Calling it a "great quarter," the Wendy's executive said he's optimistic about next year and is quite confident the company can achieve its guidance for $350 million to $360 million in earnings before interest, taxes, depreciation and amortization (EBITDA) for 2013.

-By CNBC's Justin Menza

Questions? Comments? Email us at consumernation@cnbc.com.

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