High beef costs, intense competition hit Wendy's sales and profit

(Adds details, share reaction)

Nov 6 (Reuters) - Wendy's Co, the No. 3 U.S. hamburger chain, reported quarterly sales and profit below analysts' estimates, mostly due to higher beef costs and intense competition in North America.

Wendy's, like market leader McDonald's Corp, has been struggling in an increasingly competitive fast-food market and has been investing heavily to spruce up its restaurants and expand its menu offerings.

Casual dining restaurants like Chipotle Mexican Grill Inc and Panera Bread Co have been eating into the market share of fast-food restaurants by offering consumers a wider choice of healthier meals.

Wendy's shares were down 2 percent at $7.90 in premarket trading on Thursday.

Same-restaurant sales at company-owned outlets rose 2 percent in the third quarter ended Sept. 28 compared with a year earlier, short of the average estimate of 2.4 percent, according to market research firm Consensus Metrix.

Margins slipped to 15.5 percent from 15.6 percent.

McDonald's U.S. same-restaurant sales fell by a steeper-than-expected 3.3 percent in the third quarter.

Wendy's, known for its square, fresh beef burgers and thick "Frosty" milkshakes, has been selling company-owned restaurants to franchisees to cut costs and fund a long-term image overhaul.

The company said it sold 12 North American restaurants to franchisees in the quarter, as well as shutting a few of its own restaurants as part of its re-imaging program.

Revenue fell 20 percent to $512.5 million as a result, the company said.

As of Sept 28 there were 6,532 Wendy's restaurants, of which 995 were owned by the company.

Wendy's net income rose to $22.8 million, or 6 cents per share, in the quarter, compared with a loss of $1.9 million, or breakeven on a per-share basis, a year earlier

Excluding items, the company earned 8 cents per share.

Analysts on average had expected a profit of 9 cents per share on revenue of $516.3 million, according to Thomson Reuters I/B/E/S.

Up to Wednesday's close, Wendy's shares had fallen 7.6 percent this year.

(Reporting By Nayan Das in Bangalore; Editing by Ted Kerr)