The Wendy's Company — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenues increased 1.7% year-over-year to $570.6 million for the second quarter of 2026, compared to $560.9 million in 2025; year-to-date revenues rose 2.5% to $1,111.2 million versus $1,084.4 million.
• Adjusted revenues decreased 1.4% to $443.2 million for the quarter and increased 0.3% to $875.4 million year-to-date.
• Net income declined 40.8% to $32.6 million for the quarter and 41.4% to $55.3 million year-to-date.
• Adjusted EBITDA fell 15.4% to $124.1 million for the quarter and 13.2% to $235.4 million year-to-date.
• Reported diluted earnings per share were $0.17 for the quarter (down from $0.29) and $0.29 year-to-date (down from $0.48); adjusted EPS was $0.18 for the quarter and $0.30 year-to-date.
• U.S. Company-Operated Restaurant Margin decreased 240 basis points to 13.8% in the second quarter and 290 basis points to 12.7% year-to-date.
• General and administrative expense increased 11.3% to $66.2 million for the quarter and 8.8% to $139.0 million year-to-date.
• Net cash provided by operating activities was $160.0 million for the first half of 2026, up 9.6% from $146.0 million in 2025.
• Free cash flow was $120.3 million for the first half of 2026, up 9.9% from $109.5 million in 2025.
• Cash and cash equivalents increased to $341.2 million as of June 28, 2026, from $300.8 million as of December 28, 2025.
• Long-term debt decreased to $2.719 billion as of June 28, 2026, from $2.731 billion as of December 28, 2025.

Guidance and Future Outlook

• The Company withdrew its 2026 financial outlook to allow new leadership to fully assess business opportunities and formulate a comprehensive turnaround plan.
• Management identified five focus areas for the turnaround: rebuilding a quality menu at compelling value, marketing that drives demand, operational excellence, a digital experience that builds frequency, and restaurants as an engine for growth.
• Capital allocation is being updated to provide flexibility to support the turnaround and fund the growth plan.

Business Segments and Product Lines

• Global systemwide sales decreased 6.5% year-over-year, driven by an 8.2% decline in the U.S. and partially offset by 3.4% growth in international markets.
• U.S. same-restaurant sales decreased 7.0%, while international same-restaurant sales decreased 2.3%.
• U.S. Company-operated restaurant margin decline was attributed to commodity inflation, traffic decline, and labor rate inflation, partially offset by an increase in average check and labor efficiencies.
• The decrease in franchise royalty revenue and franchise rental income contributed to lower total revenues, partially offset by higher advertising funds revenue and non-recurring vendor incentives.
• Restaurant count in the U.S. decreased by 81 net locations in the second quarter (21 openings, 102 closures) and by 245 net locations year-to-date (44 openings, 289 closures).
• International restaurant count increased by 10 net locations in the second quarter (27 openings, 17 closures) and by 28 net locations year-to-date (54 openings, 26 closures).
• Global restaurant count ended the quarter at 7,180 locations.

Market and Competitive Landscape

• Management noted that traffic, value proposition, and franchisee economics are not meeting expectations in the current fast-evolving QSR landscape.
• The Company operates across more than 7,000 restaurants worldwide employing hundreds of thousands of people.

Risks and Challenges

• Key risks include adverse economic conditions, changes in discretionary consumer spending, competition, and poor customer experiences.
• Operational risks involve commodity and labor cost inflation, supply chain interruptions, and the ability to manage real estate leasing and ownership.
• Strategic risks include the ability to successfully implement the turnaround plan, manage digital commerce strategies, and execute international growth.
• The Company faces risks related to its securitized financing facility, debt covenants, and capital allocation policies.
• Potential transactions with Trian Fund Management, L.P. and affiliates are noted as a risk factor, with no assurance that such transactions will occur or enhance value.

Management Commentary and Tone

• Bob Wright, President and CEO, stated that while Wendy's is an iconic brand with exceptional assets, the company is "clearly not performing at our potential."
• Management expressed confidence in the brand's quality heritage as a foundation for the turnaround and a commitment to working with the team and franchisees to drive growth.
• The tone indicates a focus on immediate action across five strategic areas to address issues with traffic and value proposition.

Other Key Points

• The Company announced a reduction in its quarterly dividend to $0.07 per share, resulting in an updated annualized rate of $0.28 per share, to create flexibility for investing in the turnaround.
• The dividend is payable on September 15, 2026, to shareholders of record as of September 1, 2026.
• The Company did not repurchase any shares in the second quarter of 2026 or the third quarter of 2026 as of the release date.
• Approximately $35.0 million remained available under the share repurchase authorization as of July 31, 2026, which expires in February 2027.
• The Company acquired franchise-operated restaurants during the third quarter of 2025, contributing to higher Company-operated restaurant sales in the current period.
• The increase in general and administrative expense was driven by investments in professional services and employee compensation and benefits.
• The decrease in adjusted EBITDA was primarily driven by lower franchise royalty revenue, increased G&A, lower U.S. Company-Operated Restaurant Margin, and lower net franchise fees due to an increase in the provision for doubtful accounts.