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The Wendy's Company: Still Bearish As Demand Backdrop Remains Poor
Seeking Alpha· 2025-08-20 13:15
I wrote about The Wendy’s Company (NASDAQ: WEN ) previously with a sell rating, as I did not see hopes for growth to inflect higher given the weak traffic data and poorI am an individual investor that is now fully focus on managing my own capital that I have saved up over the years. My investing background spreads across a wide spectrum as I believe there are merits to each approach, for instance: Fundamental investing [Bottoms-up etc.], Technical investing [historical charts analysis], and to some extend m ...
Wendy's: High Dividend Play Buying Back Shares Selling At A Reasonable Discount
Seeking Alpha· 2025-08-13 09:04
Core Insights - The article highlights the extensive experience of Mehmood, founder and director of Moods Investment Research, with over 20 years in the financial sector, particularly in securities analysis and capital markets investment [1] Group 1: Company Profile - Moods Investment Research is based in Ontario, Canada, and focuses on investment research [1] - Mehmood has previously served as vice president at Mashreqbank in Dubai, UAE, indicating a strong background in banking and finance [1] - The company specializes in analyzing securities and managing a sizable portfolio that includes equities and real estate investments [1] Group 2: Educational Background - Mehmood holds a BA (Hons) degree with a double major in Law & Politics from York University, Toronto, Canada, which adds to his analytical capabilities in the investment field [1]
Wendy's and McDonald's Report Breakfast Business Slows Amid Consumer Cutbacks
PYMNTS.com· 2025-08-08 23:57
Core Insights - Fast food chains, particularly Wendy's and McDonald's, are experiencing a decline in their breakfast business as consumers cut back on spending [2][3] - Executives from both companies noted that breakfast is the weakest meal period, with consumers opting to eat at home during times of financial uncertainty [2][3] Company Performance - Wendy's interim CEO indicated that increased consumer uncertainty leads to reduced breakfast purchases, as this meal is often the first to be skipped [2] - McDonald's CEO confirmed that breakfast is the weakest daypart, with some customers not visiting for that meal [2] - McDonald's reported a slowdown in U.S. outlet growth to 2.5% in the spring quarter, attributed to continued pressure on lower-income consumers [3] Consumer Behavior - Despite a cautious consumer mood, U.S. households are showing resilience in spending, particularly in essentials and packaged goods [4] - Back-to-school spending has been a standout category, while travel and luxury spending face challenges [4] - A report indicated that nearly one-third of consumers delayed or canceled discretionary purchases in June due to financial pressures [5] Financial Sentiment - The financial security of consumers significantly impacts their spending behavior, with 31% of financially secure consumers maintaining their purchasing frequency despite price increases, compared to only 13% of paycheck-to-paycheck consumers [6]
Wendy’s(WEN) - 2026 Q2 - Quarterly Report
2025-08-08 20:17
PART I: FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents The Wendy's Company's unaudited condensed consolidated financial statements for the quarterly period ended June 29, 2025, including Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, and Cash Flows, along with detailed notes explaining the basis of presentation and key accounting policies [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2025, total assets decreased to **$4.89 billion** from **$5.03 billion** at year-end 2024, primarily due to a reduction in cash and cash equivalents, while total liabilities remained relatively stable at **$4.78 billion**, and total stockholders' equity decreased significantly from **$259.4 million** to **$112.9 million**, driven by treasury stock repurchases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$4,894,148** | **$5,034,843** | | Cash and cash equivalents | $281,226 | $450,512 | | **Total Liabilities** | **$4,781,260** | **$4,775,491** | | Long-term debt | $2,650,907 | $2,662,130 | | **Total Stockholders' Equity** | **$112,888** | **$259,352** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, total revenues slightly decreased to **$560.9 million** compared to **$570.7 million** in Q2 2024, yet operating profit increased to **$104.3 million** from **$99.5 million**, and net income was stable at **$55.1 million**, with diluted EPS rising to **$0.29** from **$0.27** year-over-year Q2 and H1 2025 vs 2024 Performance (in thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $560,929 | $570,727 | $1,084,401 | $1,105,480 | | Operating Profit | $104,260 | $99,507 | $187,386 | $180,663 | | Net Income | $55,110 | $54,643 | $94,342 | $96,636 | | Diluted EPS | $0.29 | $0.27 | $0.48 | $0.47 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 29, 2025, net cash from operating activities was stable at **$146.0 million**, cash used in investing activities increased to **$52.3 million**, and cash used in financing activities significantly increased to **$272.7 million**, primarily due to a large increase in common stock repurchases (**$186.5 million** in 2025 vs. **$34.2 million** in 2024), resulting in a net decrease in cash of **$173.5 million** Six Months Ended Cash Flow Summary (in thousands) | Cash Flow Activity | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $146,008 | $145,463 | | Net cash used in investing activities | ($52,264) | ($43,958) | | Net cash used in financing activities | ($272,687) | ($162,382) | | Net decrease in cash | ($173,506) | ($64,175) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on key financial statement components, outlining the basis of presentation, disaggregating revenue by segment, detailing lease accounting, long-term debt structure, stockholder equity activities including dividends and repurchases, and providing segment-level financial performance - The company's business is managed and reported in three segments: Wendy's U.S., Wendy's International, and Global Real Estate & Development[25](index=25&type=chunk) Total Revenues by Segment - Q2 2025 (in thousands) | Segment | Q2 2025 Revenue | | :--- | :--- | | Wendy's U.S. | $461,142 | | Wendy's International | $38,850 | | Global Real Estate & Development | $60,937 | | **Total** | **$560,929** | - During Q1 and Q2 2025, the company paid dividends of **$0.25** and **$0.14 per share**, respectively[66](index=66&type=chunk) - In the first six months of 2025, the company repurchased **12,957 thousand shares** for an aggregate price of **$186.0 million** under its January 2023 authorization, leaving **$49.0 million** available[67](index=67&type=chunk) [Management's Discussion and Analysis (MD&A)](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the second quarter and first half of 2025, covering a slight decrease in global systemwide sales and revenues, segment performance, revenue and expense fluctuations, and an overview of liquidity, capital resources, and cash flows [Executive Overview and Key Business Measures](index=28&type=section&id=Executive%20Overview%20and%20Key%20Business%20Measures) As of June 29, 2025, the Wendy's system comprised **7,334 restaurants**, with approximately **5%** being company-operated, and management tracks performance using key metrics such as Same-Restaurant Sales, Company-Operated Restaurant Margin, and Systemwide Sales - As of June 29, 2025, the Wendy's system had **7,334 restaurants**, with **5,967** in the U.S. and **1,367** internationally[119](index=119&type=chunk) - Key business measures used by management include **Same-Restaurant Sales**, **Company-Operated Restaurant Margin**, and **Systemwide Sales**[123](index=123&type=chunk)[124](index=124&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) In Q2 2025, revenues decreased **1.7%** to **$560.9 million**, and global same-restaurant sales fell **2.9%**, driven by a **3.6%** decline in the U.S. despite a **1.8%** increase internationally, primarily due to lower traffic partially offset by a higher average check Same-Restaurant Sales Growth - Q2 2025 vs Q2 2024 | Region/Type | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | U.S. Systemwide | (3.6)% | 0.6% | | International | 1.8% | 2.5% | | **Global Systemwide** | **(2.9)%** | **0.8%** | - The decrease in sales for company-operated restaurants was primarily due to a decrease in traffic, partially offset by a higher average check[140](index=140&type=chunk) - Cost of sales as a percentage of sales increased in Q2 2025, driven by higher commodity costs and restaurant labor rates, which was partially offset by labor efficiencies and higher average check[146](index=146&type=chunk) [Segment Information](index=37&type=section&id=Segment%20Information) In Q2 2025, Wendy's U.S. segment revenues declined to **$461.1 million** but profit slightly increased to **$137.2 million**, while Wendy's International segment saw revenue growth to **$38.9 million** and profit increase to **$13.2 million**, and Global Real Estate & Development segment's revenue and profit both slightly decreased Segment Profit (Adjusted EBITDA) - Q2 2025 vs Q2 2024 (in millions) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Wendy's U.S. | $137.2 | $136.7 | | Wendy's International | $13.2 | $10.7 | | Global Real Estate & Development | $27.3 | $28.2 | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 29, 2025, the company held **$330.1 million** in cash, cash equivalents, and restricted cash, with management believing current cash and operating cash flows are sufficient for the next 12 months, despite significant cash used in financing activities due to **$186.0 million** in stock repurchases and **$76.2 million** in dividends - The company repurchased **13.0 million shares** for **$186.0 million** in the first six months of 2025[170](index=170&type=chunk) - Dividends paid in the first half of 2025 totaled **$76.2 million**[171](index=171&type=chunk) - The significant increase in cash used in financing activities was primarily due to a **$152.3 million** increase in common stock repurchases compared to the prior year[177](index=177&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports that as of June 29, 2025, there have been no material changes to the market risk information previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 29, 2024 - There were no material changes from the market risk information contained in the Company's Form 10-K for the fiscal year ended December 29, 2024[180](index=180&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Interim CEO and CFO, concluded the company's disclosure controls and procedures were effective as of June 29, 2025, with no material changes in internal control over financial reporting during the second quarter of 2025 - Based on evaluations, the Interim CEO and CFO concluded that as of June 29, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[181](index=181&type=chunk) - No changes in internal control over financial reporting occurred during the second quarter of 2025 that materially affected, or are reasonably likely to materially affect, its internal control[182](index=182&type=chunk) PART II: OTHER INFORMATION [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various litigation and claims incidental to its business, for which management believes it has established adequate accruals, though an aggregate possible range of loss cannot be estimated due to the preliminary stage of many proceedings - The Company believes it has adequate accruals for all of its legal and environmental matters but cannot estimate the aggregate possible range of loss for existing litigation and claims[186](index=186&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes from the risk factors that were previously disclosed in its Annual Report on Form 10-K - There have been no material changes from the risk factors previously disclosed in the Company's Form 10-K[187](index=187&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases during the second quarter of 2025, with **4.78 million shares** repurchased at an average price of **$12.97 per share**, leaving **$49.0 million** available under the existing plan Share Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Value Remaining Under Plan | | :--- | :--- | :--- | :--- | | **Total Q2 2025** | **4,777,483** | **$12.97** | **$49,037,650** | - The Board of Directors authorized a **$500.0 million** repurchase program in January 2023, effective through February 28, 2027[192](index=192&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including a marketing consulting agreement and certifications from the Interim CEO and CFO as required by the Sarbanes-Oxley Act - Exhibits filed include a Marketing Consulting Agreement, CEO/CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and financial data in Inline XBRL format[193](index=193&type=chunk)
Wendy's says it realized it had 'too many' promotions this summer, confusing customers
Business Insider· 2025-08-08 14:53
Core Insights - Wendy's plans to reduce the number of promotions for the remainder of the year after experiencing challenges with too many initiatives during the summer [1][2] - The company reported earnings per share of $0.29, a 7.4% increase year-on-year, and revenue of $560.9 million, a 1.7% decrease, both exceeding analysts' expectations [3] - Foot traffic to Wendy's locations decreased by 3% compared to the same quarter last year, although this was an improvement from a 4.7% decline in Q1 [8] Promotions and Strategy - The interim CEO highlighted that the summer promotions, while appealing, overwhelmed restaurant teams and confused customers [2] - Future focus will be on chicken innovation and a new beverage lineup, including a collaboration with Netflix for the second season of "Wednesday" [3] Technology and Innovation - Wendy's is expanding its use of voice AI for drive-thru orders, aiming to implement this technology in up to 600 restaurants by the end of 2025 [9] - The company has been testing innovative drive-thru solutions, including food delivery robots in underground tunnels [9] Market Reaction - Following the earnings report, Wendy's shares increased by approximately 1.5% [4]
Wendy’s(WEN) - 2025 Q2 - Earnings Call Transcript
2025-08-08 13:30
Financial Data and Key Metrics Changes - Global system-wide sales declined by 1.8% on a constant currency basis, driven by a 3.6% decrease in same restaurant sales in the U.S. [33][16] - Adjusted EBITDA was $146.6 million, an increase of 2.5% year-over-year, while adjusted earnings per share rose by 7.4% to $0.29 [38][18] - Free cash flow generated in the first half of the year was $109.5 million, reflecting strong cash generation capabilities [39] Business Line Data and Key Metrics Changes - The U.S. same restaurant sales declined by 3.6%, partially offset by a higher average check, while same restaurant sales at U.S. company-owned restaurants outperformed the U.S. system by almost 300 basis points, declining only 0.7% [33][34] - The international segment achieved system-wide sales growth of 8.7%, with notable increases in Japan (27%) and Mexico (16%) [35][34] Market Data and Key Metrics Changes - The company anticipates full-year global system-wide sales to decline between 3% to 5% year-over-year, reflecting a challenging competitive environment and dynamic consumer behavior [48][29] - U.S. company-operated restaurant margin is expected to be around 14%, with commodity inflation projected at approximately 4% [49] Company Strategy and Development Direction - The company is focusing on improving execution and performance while maintaining its long-term strategy, emphasizing the importance of franchisee partnerships [5][6] - Key strategic priorities include fresh food innovation, enhancing customer experience, and accelerating net unit growth, with a target of 2% to 3% net new unit growth for the year [30][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the consumer and competitive environment has changed significantly, leading to a revised outlook for the year [4][29] - The company is committed to strengthening its franchisee relationships and improving operational efficiencies to drive better results [14][15] Other Important Information - The company returned over $88 million to shareholders through dividends and share repurchases in the second quarter, totaling over $262 million in the first half of the year [18][43] - The company is on track to return approximately $325 million to shareholders in 2025, an increase of $40 million compared to 2024 [43] Q&A Session Summary Question: Assessment of marketing value menu performance - Management noted that the first half of the year faced challenges due to changing consumer behavior and weather impacts, leading to a reassessment of marketing strategies for the second half [61][60] Question: Franchisee sentiment and alignment on value - Management indicated that franchisee relationships are good but can be improved, emphasizing the need for better communication and prioritization of initiatives [72][74] Question: Revisiting U.S. franchise development - Management confirmed a commitment to improving franchisee economics through new data analytics capabilities and detailed P&L discussions at the restaurant level [86][87] Question: Customer satisfaction and same-store sales growth - Management is actively tracking customer satisfaction and believes improvements will lead to increased frequency of visits, with positive trends already observed [90][91] Question: Core menu pricing strategy - Management acknowledged the need to evaluate core menu pricing and emphasized the importance of quality in conjunction with pricing strategies [96][98] Question: Changes to chicken patty and focus on chicken - Management confirmed the use of high-quality ingredients for chicken products and expressed confidence in the new chicken tenders outperforming competitors in tests [107][108]
Wendy's (WEN) Tops Q2 Earnings and Revenue Estimates
ZACKS· 2025-08-08 13:10
Company Performance - Wendy's reported quarterly earnings of $0.29 per share, exceeding the Zacks Consensus Estimate of $0.25 per share, and up from $0.27 per share a year ago, representing an earnings surprise of +16.00% [1] - The company posted revenues of $560.93 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.97%, although this is a decrease from year-ago revenues of $570.73 million [2] - Over the last four quarters, Wendy's has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Wendy's shares have declined approximately 38.9% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.25 on revenues of $557.94 million, and for the current fiscal year, it is $0.93 on revenues of $2.2 billion [7] Industry Context - The Retail - Restaurants industry, to which Wendy's belongs, is currently ranked in the bottom 27% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Wendy's stock performance [5]
Wendy’s(WEN) - 2026 Q2 - Quarterly Results
2025-08-08 11:05
Q2 2025 Earnings Release Overview [Performance Summary & Highlights](index=1&type=section&id=Performance%20Summary%20%26%20Highlights) In Q2 2025, Wendy's experienced a global systemwide sales decline of 1.8%, driven by a 3.3% drop in the U.S. market, which was partially offset by strong international growth of 8.7%. Despite the sales dip, the company reported a 7.4% increase in both reported and adjusted diluted EPS to $0.29 and continued its global expansion by adding 44 new restaurants - Interim CEO Ken Cook highlighted strong momentum in the International business (**8.7% systemwide sales growth**) and acknowledged the need to improve U.S. performance by strengthening franchisee relationships, marketing effectiveness, and customer experience[3](index=3&type=chunk) Q2 2025 Operational Highlights (vs. Q2 2024) | Operational Highlights | US | Intl | Global | | :--- | :--- | :--- | :--- | | **Systemwide Sales Growth** | (3.3)% | 8.7% | (1.8)% | | **Same-Restaurant Sales Growth** | (3.6)% | 1.8% | (2.9)% | | **Net Restaurant Openings** | 9 | 17 | 26 | Q2 2025 Key Financial Highlights (vs. Q2 2024, in millions) | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $560.9M | $570.7M | (1.7)% | | Operating Profit | $104.3M | $99.5M | 4.8% | | Net Income | $55.1M | $54.6M | 0.9% | | Adjusted EBITDA | $146.6M | $143.1M | 2.5% | | Reported Diluted EPS | $0.29 | $0.27 | 7.4% | | Adjusted EPS | $0.29 | $0.27 | 7.4% | [Detailed Financial Analysis (Q2 2025)](index=2&type=section&id=Detailed%20Financial%20Analysis%20(Q2%202025)) The decline in total revenues was primarily due to lower U.S. restaurant sales and franchise royalties. Operating profit increased by 4.8% to $104.3 million, benefiting from lower advertising spend and G&A expenses, which offset margin pressures from commodity and labor inflation in U.S. company-operated restaurants. Adjusted EPS grew to $0.29, aided by share repurchases - The decrease in total revenues was mainly caused by lower U.S. Company-operated restaurant sales, reduced franchise royalty revenue, and lower advertising funds revenue[8](index=8&type=chunk) - U.S. Company-operated restaurant margin decreased from **16.5% to 16.2%** due to commodity and labor inflation and a decline in traffic, which were partially offset by a higher average check and labor efficiencies[9](index=9&type=chunk) - Operating profit grew primarily due to a decrease in the Company's investment in advertising spend, lower reorganization costs, and reduced general and administrative expenses[11](index=11&type=chunk) - The increase in Adjusted EPS was driven by fewer outstanding shares from the company's share repurchase program and an increase in Adjusted EBITDA[15](index=15&type=chunk) [Capital Allocation](index=3&type=section&id=Capital%20Allocation) In Q2 2025, the company returned $88.7 million to shareholders through dividends and share repurchases. A quarterly dividend of $0.14 per share was declared, and 4.8 million shares were repurchased for $61.9 million during the quarter - The company declared a regular quarterly cash dividend of **$0.14 per share**, payable on September 16, 2025[16](index=16&type=chunk) - Wendy's repurchased **4.8 million shares** for **$61.9 million** in Q2 2025. As of August 1, approximately **$40.2 million** remained available under the current share repurchase authorization[17](index=17&type=chunk) [Full-Year 2025 Outlook](index=3&type=section&id=Full-Year%202025%20Outlook) Wendy's reaffirmed its global net unit growth forecast of 2-3% but revised its full-year 2025 guidance downwards for several key metrics. The company now expects global systemwide sales to decline by 3.0% to 5.0% and adjusted EPS to be in the range of $0.82 to $0.89, a reduction from previous forecasts Updated Full-Year 2025 Guidance (in millions, where applicable) | Metric | Current Outlook | Previous Outlook | | :--- | :--- | :--- | | Global systemwide sales growth | (5.0)% to (3.0)% | (2.0)% to flat | | Adjusted earnings per share | $0.82 to $0.89 | $0.92 to $0.98 | | Adjusted EBITDA | $505M to $525M | $530M to $545M | | Free cash flow | $160M to $175M | $185M to $205M | - The company reaffirmed its guidance for Global net unit growth at **2% to 3%** and Capital expenditures plus franchise development fund investments at **$165 million to $175 million**[18](index=18&type=chunk) Financial Statements & Reconciliations [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, total revenues decreased to $560.9 million from $570.7 million in the prior year. However, operating profit increased to $104.3 million from $99.5 million, and net income rose slightly to $55.1 million, resulting in a diluted EPS of $0.29 Q2 2025 Statement of Operations (in thousands) | Line Item | Three Months Ended 2025 | Three Months Ended 2024 | | :--- | :--- | :--- | | Total Revenues | $560,929 | $570,727 | | Operating profit | $104,260 | $99,507 | | Income before income taxes | $75,900 | $74,823 | | Net income | $55,110 | $54,643 | | Diluted net income per share | $0.29 | $0.27 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2025, Wendy's reported total assets of $4.89 billion, a decrease from $5.03 billion at the end of 2024. The decline was primarily driven by a reduction in cash and cash equivalents. Total liabilities remained relatively stable at $4.78 billion, while total stockholders' equity decreased significantly to $112.9 million from $259.4 million, largely due to treasury stock repurchases Balance Sheet Summary (in thousands) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $281,226 | $450,512 | | Total current assets | $600,446 | $736,140 | | Total assets | $4,894,148 | $5,034,843 | | Total liabilities | $4,781,260 | $4,775,491 | | Total stockholders' equity | $112,888 | $259,352 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 29, 2025, net cash provided by operating activities was stable at $146.0 million. Net cash used in investing activities increased to $52.3 million due to higher capital expenditures. Financing activities used a significant $272.7 million, primarily for common stock repurchases ($186.5 million) and dividends ($76.2 million), leading to a net decrease in cash Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended 2025 | Six Months Ended 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $146,008 | $145,463 | | Net cash used in investing activities | ($52,264) | ($43,958) | | Net cash used in financing activities | ($272,687) | ($162,382) | | Net decrease in cash | ($173,506) | ($64,175) | [Non-GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations from GAAP measures to non-GAAP measures used by management, including Adjusted EBITDA, Adjusted Revenues, Adjusted Income, Adjusted EPS, and Free Cash Flow. These adjustments primarily remove the effects of advertising funds, system optimization, and other non-recurring items to provide a clearer view of core operating performance [Reconciliation of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20and%20Revenues%20to%20Adjusted%20Revenues) For Q2 2025, Net Income of $55.1 million was reconciled to an Adjusted EBITDA of $146.6 million. Total Revenues of $560.9 million were reconciled to Adjusted Revenues of $449.6 million, primarily by excluding advertising funds revenue Q2 2025 Reconciliation Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $55,110 | $54,643 | | **Adjusted EBITDA** | **$146,639** | **$143,125** | | Revenues | $560,929 | $570,727 | | **Adjusted revenues** | **$449,564** | **$455,663** | [Reconciliation of Net Income to Adjusted Income and Adjusted EPS](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Income%20and%20Adjusted%20EPS) In Q2 2025, GAAP Net Income of $55.1 million was adjusted to $56.1 million for Adjusted Income. Both GAAP Diluted EPS and Adjusted EPS were $0.29 for the quarter, as the per-share impact of adjustments was negligible Q2 2025 EPS Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (in thousands) | $55,110 | $54,643 | | **Adjusted income (in thousands)** | **$56,072** | **$56,646** | | Diluted earnings per share | $0.29 | $0.27 | | **Adjusted earnings per share** | **$0.29** | **$0.27** | [Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow](index=13&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) For the first six months of 2025, Net Cash Provided by Operating Activities of $146.0 million was reconciled to a Free Cash Flow of $109.5 million. This calculation subtracts capital expenditures and franchise development fund investments and adjusts for the impact of advertising funds Six-Month Free Cash Flow Reconciliation (in thousands) | Line Item | Six Months Ended 2025 | Six Months Ended 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $146,008 | $145,463 | | Capital expenditures | ($39,050) | ($34,465) | | Franchise development fund | ($16,518) | ($11,477) | | **Free cash flow** | **$109,505** | **$112,874** | Disclosures & Definitions [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains the standard safe harbor statement, cautioning that forward-looking statements regarding future performance are subject to numerous risks and uncertainties. It lists 26 specific risk factors, including competition, economic conditions, consumer spending, supply chain issues, and the company's predominantly franchised business model, that could cause actual results to differ materially from expectations - The release contains forward-looking statements based on current expectations, which are subject to various risks and uncertainties that could cause actual results to differ[22](index=22&type=chunk) - Key risk factors include competition, adverse economic conditions, changes in consumer spending, food safety events, ability to achieve growth strategy, changes in operating costs, labor shortages, and risks associated with the company's franchised business model[23](index=23&type=chunk) [Disclosure Regarding Non-GAAP Financial Measures](index=6&type=section&id=Disclosure%20Regarding%20Non-GAAP%20Financial%20Measures) The company explains its use of non-GAAP financial measures such as adjusted revenue, adjusted EBITDA, adjusted EPS, and free cash flow. These measures are used internally for performance evaluation and benchmarking, as they exclude items that may not be indicative of core operating performance, providing investors with a supplemental perspective on business trends - The company uses non-GAAP measures like adjusted revenue, adjusted EBITDA, and adjusted EPS as internal metrics to evaluate operating performance and for executive compensation goals[27](index=27&type=chunk) - Free cash flow is defined as cash flows from operations minus capital expenditures, franchise development fund expenditures, and the net change in restricted advertising fund assets and liabilities[28](index=28&type=chunk) [Key Business Measures](index=7&type=section&id=Key%20Business%20Measures) This section defines the key business measures used by Wendy's to track performance, including same-restaurant sales, systemwide sales, and U.S. Company-operated restaurant margin. It clarifies that sales growth metrics are calculated on a constant currency basis and exclude Argentina due to its highly inflationary economy - Key business measures include same-restaurant sales, systemwide sales, and Company-operated restaurant margin[32](index=32&type=chunk) - Same-restaurant sales and systemwide sales growth are calculated on a constant currency basis to provide better year-over-year comparability and exclude sales from Argentina[35](index=35&type=chunk)[36](index=36&type=chunk) - U.S. Company-operated restaurant margin is defined as sales from U.S. Company-operated restaurants less cost of sales (food, paper, labor, occupancy, advertising, other operating costs) divided by those sales[37](index=37&type=chunk)
THE WENDY'S COMPANY REPORTS SECOND QUARTER 2025 RESULTS
Prnewswire· 2025-08-08 11:00
Core Viewpoint - The Wendy's Company reported a decline in overall systemwide sales for the second quarter of 2025, primarily due to lower same-restaurant sales in the U.S., while the international segment showed strong growth. Operational Highlights - The company opened 44 new restaurants in the second quarter, totaling 118 new openings in the first half of 2025 [2] - International systemwide sales grew by 8.7%, while U.S. systemwide sales declined by 3.3% [2][5] - Same-restaurant sales growth in the U.S. was down 3.6%, compared to a 1.8% increase in the international segment [2][5] - The total restaurant count at the end of the quarter was 7,334, with 5,967 in the U.S. and 1,367 internationally [2] Financial Highlights - Total revenues for the second quarter were $560.9 million, a decrease of 1.7% from the previous year [4] - Adjusted revenues were $449.6 million, down 1.3% year-over-year [4] - U.S. Company-operated restaurant margin decreased to 16.2%, down from 16.5% [4][7] - Operating profit increased to $104.3 million, up 4.8% from the previous year [4][10] - Net income for the quarter was $55.1 million, a slight increase of 0.9% [4][11] - Reported diluted earnings per share were $0.29, reflecting a 7.4% increase [4][13] Cash Flow and Shareholder Returns - Cash flow from operations was $146.0 million, a 0.3% increase year-over-year [4] - The company returned $88.7 million to shareholders through dividends and share repurchases [9] - The company repurchased 4.8 million shares for $61.9 million in the second quarter [15] 2025 Outlook - The company reaffirmed its global net unit growth target of 2-3% and capital expenditures between $165 million and $175 million [16] - The updated expectations for global systemwide sales growth are now between -5.0% to -3.0% [16] - Adjusted earnings per share are expected to be between $0.82 and $0.89, down from previous estimates [16]
Wendy's Q2 Preview: Can Fast Food Giant Show Traffic Gains? Could Netflix Help With Guidance?
Benzinga· 2025-08-07 18:23
Core Viewpoint - Wendy's is expected to report a decline in second-quarter revenue and earnings per share, continuing a trend of missed analyst estimates in recent quarters [1][2]. Financial Performance - Analysts estimate second-quarter revenue at $560.4 million, down from $570.7 million in the previous year [1]. - Expected earnings per share for the second quarter is 26 cents, a decrease from 27 cents in the same quarter last year [2]. - Wendy's has missed analyst estimates in six of the last ten quarters [2]. Traffic and Sales Trends - Wendy's visits decreased by 3.0% year-over-year in the second quarter, an improvement from a 4.7% decline in the first quarter [3]. - The company reported a sales decline of 2.1% year-over-year in the first quarter, with U.S. sales down 2.6% [4]. Promotions and Future Growth - The second quarter included several promotions, such as new Frosty's and the Cajun Crunch Spicy Chicken, along with free fries offerings [4]. - A new promotion, "Meal of Misfortune," in partnership with Netflix's "Wednesday," is set to launch in the third quarter, which may help drive future traffic [5][7]. - Wendy's is focusing on international expansion, with plans to achieve 70% of unit growth outside the U.S. and aims to reach 2,000 international restaurants by 2028 [8][9]. Leadership Changes - The company is currently searching for a new CEO following Kirk Tanner's departure, with CFO Ken Cook serving as interim CEO [7]. Stock Performance - Wendy's stock is currently flat at $10.02, down 37.8% year-to-date, within a 52-week trading range of $9.74 to $20.60 [9].