Financial Performance - Global systemwide sales decreased 2.7% to $3.5 billion in Q3 2025 compared to $3.6 billion in Q3 2024[137] - Revenues decreased 3.0% to $549.5 million in Q3 2025 compared to $566.7 million in Q3 2024[137] - Global same-restaurant sales decreased 3.7%, with U.S. same-restaurant sales down 4.7% and international same-restaurant sales up 3.0% compared to Q3 2024[137] - Income before income taxes decreased 9.2% to $63.2 million in Q3 2025 compared to $69.7 million in Q3 2024[137] - Net income for Q3 2025 was $44.3 million, down 11.1% from $50.2 million in Q3 2024[139] - Global systemwide sales decreased 2.1% to $10.6 billion in the first nine months of 2025 compared to $10.8 billion in the first nine months of 2024[137] - Revenues decreased 2.3% to $1.6 billion in the first nine months of 2025 compared to $1.7 billion in the first nine months of 2024[137] - Global same-restaurant sales decreased 2.9%, with U.S. same-restaurant sales down 3.7% and international same-restaurant sales up 2.4% compared to the first nine months of 2024[137] - Income before income taxes decreased by 3.9% to $194.1 million in the first nine months of 2025, down from $201.9 million in the same period of 2024[140] Digital Sales - Digital sales increased to approximately 21.0% of global systemwide sales in Q3 2025, up from approximately 17.6% in Q3 2024[137] - Digital sales represented approximately 20.6% of global systemwide sales in the first nine months of 2025, up from 17.1% in the same period of 2024[140] Restaurant Operations - Systemwide restaurant count increased by 29 net new restaurants in Q3 2025[137] - The restaurant count increased to 7,363 as of September 28, 2025, with a net addition of 54 restaurants in the third quarter[146] - The company opened 123 net new restaurants in the first nine months of 2025[140] Costs and Expenses - Total cost of sales for Q3 2025 was $204.3 million, representing 87.6% of total sales, compared to 84.9% in Q3 2024[141] - Cost of sales as a percentage of sales increased to 87.6% in the third quarter of 2025, up from 84.9% in 2024, driven by higher commodity costs and decreased traffic[151] - General and administrative expenses decreased by $4.9 million to $57.9 million in the third quarter of 2025, primarily due to lower share-based compensation[155] - Depreciation and amortization increased by $1.4 million to $38.4 million in the third quarter of 2025, mainly due to asset additions for new and remodeled restaurants[157] - Impairment of long-lived assets rose to $2.3 million in the third quarter of 2025, reflecting higher impairment charges from deteriorating operating performance of certain restaurants[160] Franchise Operations - Franchise royalty revenue and fees for Q3 2025 were $152.0 million, a slight decrease of 1.2% from $153.9 million in Q3 2024[141] - Franchise royalty revenue decreased by $4.8 million to $127.8 million in the third quarter of 2025, primarily due to a 3.9% decrease in global franchise same-restaurant sales[147] - Franchise fees increased by $2.9 million to $24.2 million in the third quarter of 2025, attributed to higher fees for IT services provided to franchisees[148] Cash Flow and Financing - Cash, cash equivalents, and restricted cash totaled $352.0 million as of September 28, 2025, with a revolving financing facility of up to $300.0 million available[174] - Net cash provided by operating activities was $275.3 million in the first nine months of 2025, down from $286.7 million in the same period of 2024[181] - Cash used in investing activities increased to $100.6 million in the first nine months of 2025, up from $68.8 million in 2024, primarily due to a $16.9 million increase in acquisition payments and an $11.7 million rise in capital expenditures[182] - Cash used in financing activities rose to $329.6 million in the first nine months of 2025, compared to $250.6 million in 2024, driven by a $140.7 million increase in common stock repurchases[183] - The company repurchased 14.4 million shares for $200.0 million under the stock repurchase program authorized in January 2023, with $35.0 million remaining under the authorization[176] Market Conditions - Inflationary pressures on labor and commodity prices have impacted consolidated results, with expectations of continued inflation throughout 2025[184] - The company plans to manage inflationary costs through selective menu price increases and product mix adjustments, although competitive pressures may limit recovery of cost increases[184] - Volatility in commodity markets, particularly for beef, chicken, eggs, pork, cheese, and grains, could significantly affect future operations[185] - Wendy's restaurant operations are moderately seasonal, with higher average sales typically occurring in summer months compared to winter[186] - As of September 28, 2025, there were no material changes in market risk disclosures from the previous fiscal year[187]

Group 1 - Wendy's is facing challenges in its turnaround efforts, as indicated by its earnings and stock performance [2] - The stock is reflecting two contrasting narratives regarding the company's future prospects [2] Group 2 - The article suggests that the path to recovery for Wendy's will not be straightforward, highlighting the complexities involved [2]

Core Insights - Wendy's plans to close 200 to 350 underperforming U.S. store locations, representing a "mid-single-digit percentage" of its approximately 6,000 locations [2][3] - The company reported third-quarter profits of $44.3 million and revenue of $549.5 million, exceeding analyst expectations by 2.71% [3] - Adjusted earnings per share (EPS) were 24 cents, surpassing the expected 20 cents [3] Store Closures - The closures will begin this year and continue through 2026, with specific locations not disclosed [4][5] - The decision to close stores is based on a case-by-case evaluation of underperforming restaurants that do not enhance the brand or negatively impact franchisee financial performance [5] - The closures are expected to improve sales and profitability at nearby locations [7] International Growth - Wendy's international business is projected to achieve over 9% net unit growth by 2025, indicating strong system-wide sales growth [3] Stock Performance - Following the announcement, Wendy's shares rose approximately 2% in midday trading after an 11.66% surge in pre-market trading [4]

Core Viewpoint - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues, particularly when ad-blockers are enabled [1] Group 1 - The article suggests that users may face restrictions if they have ad-blockers enabled, indicating a need for adjustments in browser settings to ensure smooth access [1]

Market Overview - Pre-market trading has declined, reflecting a cautious sentiment towards AI infrastructure spending and a lack of economic data, particularly during what was expected to be Jobs Week [1] - The market has seen a downward trend over the past five days, moving away from all-time highs reached in late October [1] Employment Data - Non-farm payroll numbers from the U.S. Bureau of Labor Statistics (BLS) are unavailable due to a government shutdown, with estimates suggesting a loss of 60,000 jobs last month [2] - The unemployment rate is expected to rise to 4.5%, while hourly wages are anticipated to remain steady at a year-over-year increase of 0.3% [2] - ADP reported an addition of 42,000 new jobs, which is better than BLS estimates but still indicates a weak labor market [3] - The Challenger Job Cuts report indicated 153,000 job cuts, highlighting ongoing challenges in employment [3] Interest Rate Expectations - There is a tentative expectation for a 25 basis-point interest rate cut in approximately 4.5 weeks, although market indexes may have already priced in this cut [4] - The "neutral rate" of inflation is uncertain but is believed to be higher than the optimal 2% [4] Earnings Reports - Wendy's (WEN) reported Q3 earnings of $0.24 per share, exceeding expectations by 20%, leading to a 9% increase in shares [5] - Six Flags Entertainment (FUN) posted earnings of $3.28 per share, surpassing the consensus estimate by 46.4%, although shares are down 2% in early trading [5] - Fluor (FLR) reported Q3 earnings of $0.68 per share, beating expectations by 54.55%, with shares up 4.6% in pre-market trading [6] - Constellation Energy (CEG) reported earnings of $3.04 per share, falling short of the anticipated $3.13, resulting in a 6.3% decline in shares [7] - Canopy Growth (CGC) shares increased by 12% despite reporting a loss of $0.01 per share, an improvement from the expected loss of $0.10 [8] Consumer Sentiment and Credit - The University of Michigan Consumer Sentiment report for November is expected to show a slight decrease to 53.0 from 53.6, remaining above the neutral threshold of 50 [9] - Consumer credit for September is projected to total $10.0 billion [9]

Core Insights - Wendy's Company experienced a premarket surge following a third-quarter earnings beat, attributed to stronger execution, resilient international growth, and cost discipline [1] Financial Performance - The company reported adjusted earnings per share of 24 cents, surpassing the analyst consensus estimate of 20 cents [2] - Quarterly sales amounted to $549.516 million, reflecting a 3% year-over-year decline but exceeding the Street view of $534.457 million [2] - Adjusted EBITDA increased by 2.1% to $135.2 million, driven by reduced advertising spend, lower general and administrative expenses, and higher other operating income [6] Revenue Breakdown - The decrease in total revenues was primarily due to lower advertising funds revenue and franchise royalty revenue, partially offset by an increase in franchise fees [3] - Global systemwide sales totaled $3.5 billion, showing a 2.6% decline, influenced by lower same-restaurant sales in the U.S., but supported by new restaurant openings and growth in the International segment [4] International Growth - International systemwide sales rose by 8.6%, with growth reported across all regions [4] Operational Insights - Comparable sales at company-operated restaurants outperformed the system by 4% during the third quarter, aided by the successful launch of new chicken tenders [5] - U.S. company-operated restaurant margin contracted to 13.1% from 15.6% a year ago, primarily due to commodity inflation, traffic decline, and labor rate inflation [5] Dividend and Outlook - The company announced a regular quarterly cash dividend of 14 cents per share, payable on December 15 [7] - Wendy's reaffirmed its 2025 adjusted EPS outlook at 82 cents to 89 cents, compared to the analyst consensus estimate of 86 cents [8]

Financial Data and Key Metrics Changes - Global system-wide sales declined by 2.6%, primarily due to a 4.7% decline in U.S. same restaurant sales, reflecting increased industry competition and consumer pressure [14][19]. - Adjusted EBITDA rose by 2.1% to $138 million, driven by reductions in advertising and G&A expenses [17][22]. - Adjusted EPS was $0.24 per share, slightly below the previous year's $0.25 [17][22]. - Free cash flow increased to $195-$210 million, up by $35 million from prior expectations, reflecting reduced capital expenditures [18][27]. Business Line Data and Key Metrics Changes - U.S. company-operated restaurant same restaurant sales outperformed the overall U.S. system by 400 basis points, declining only 0.7% [19][20]. - International system-wide sales grew by 8.6%, with significant growth in regions like Mexico (over 18%) and Puerto Rico (over 10%) [16][20]. - Digital sales in the U.S. increased by 14.9%, reaching a digital mix of 20.3% [20]. Market Data and Key Metrics Changes - The U.S. market remains under pressure, with sales challenges noted, while international markets continue to show strong growth [5][16]. - The company anticipates international net unit growth of over 9% in 2025, with a focus on expanding in Canada and the U.K. [12][13]. Company Strategy and Development Direction - The company is prioritizing average unit volume (AUV) growth over net unit growth in the U.S. as part of Project Fresh, a comprehensive turnaround plan [5][12]. - Project Fresh focuses on brand revitalization, operational excellence, system optimization, and capital allocation to enhance customer experience and profitability [6][10][12]. - The company is working closely with franchisees to evaluate underperforming restaurants and develop action plans, which may include closures to strengthen the overall system [11][39]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the competitive landscape and consumer pressure affecting U.S. sales, while expressing confidence in the international growth trajectory [5][14]. - The company maintains its outlook for full-year global system-wide sales, adjusted EBITDA, and adjusted EPS, while increasing the free cash flow outlook [17][27]. - Management emphasized the importance of enhancing franchisee profitability and customer experience as key to long-term growth [51][52]. Other Important Information - The company has reduced its 2025 U.S. build-to-suit capital by approximately $20 million, reflecting a strategic shift towards AUV growth [12][18]. - The company has returned over $300 million to shareholders year-to-date through dividends and share repurchases, with plans to exceed $325 million for the full year [17][24]. Q&A Session Summary Question: Franchisee cash flow and balance sheet levels - The U.S. franchisee system remains healthy overall, with some facing acute financial pressure. The company is working with these franchisees on a case-by-case basis to improve restaurant-level economics [30][31]. Question: Factors leading to underperformance relative to peers - The company noted increased pressure on lower-income consumers and emphasized its value proposition, including the Biggie Bag and $8 meal deals, which performed well [36][37]. Question: Expected closures in the U.S. due to system optimization - The company estimates mid-single-digit percentage closures, which could amount to around 300 units, with a focus on improving overall system health [39][40]. Question: Clarification on U.S. AUV growth targets - The company is focused on net unit development coming in around the low end of its guidance, with gross unit development still on track [41][42]. Question: Insights from customer segmentation study - The company is conducting a comprehensive customer segmentation study to better understand consumer preferences and improve brand communication [46][47]. Question: Beverage platform performance and breakfast strategy - Recent beverage launches performed well, and breakfast remains a key focus, with flexibility allowed for franchisees with low breakfast sales [49][51].

Financial Performance - Global systemwide sales decreased by 2.6%[25], and global system same-restaurant sales (SRS) declined by 3.7%[25] - U S systemwide sales decreased by 4.4%[25], with a SRS decline of 4.7%[25] - International systemwide sales experienced growth of 8.6%[25], and SRS grew by 3.0%[25] - Adjusted EBITDA increased by 2.1% to $138 million[32] - Adjusted EPS decreased by 4.0% to $0.24[32] Capital Allocation and Cash Flow - The company returned over $40 million to shareholders through dividends and share repurchases[25] - Year-to-date free cash flow was $195.6 million[34] - The company is on track to return over $325 million to shareholders in 2025[38] Strategic Initiatives - The company launched Project FRESH, a strategic plan to drive profitable growth and long-term value across the U S system[12] - The company opened 172 new restaurants globally year-to-date through Q3[25] 2025 Outlook - Global systemwide sales growth is projected to be between (5.0)% and (3.0)%[39] - Adjusted EBITDA is expected to be between $505 million and $525 million[39] - Adjusted EPS is projected to be between $0.82 and $0.89[39] - Free cash flow is expected to be between $195 million and $210 million[39]

Core Insights - Wendy's reported a decline in both sales and profit for the third quarter, attributed to consumers reducing their spending at restaurants [1] Company Performance - The company experienced lower sales figures in the third quarter compared to previous periods [1] - Profit margins were also negatively impacted, reflecting broader trends in consumer behavior [1] Industry Trends - The restaurant industry is facing challenges as consumers are cutting back on dining out, which is affecting sales across various chains [1]

Financial Performance - Third quarter systemwide sales decreased by 2.6% to $3.5 billion, with U.S. sales down 4.4% and international sales up 8.6%[4] - Net income for the third quarter was $44.3 million, a decrease of 11.8% compared to the previous year[5] - Adjusted earnings per share decreased by 4.0% to $0.24, impacted by higher depreciation and tax rates[5] - Total revenues for the three months ended September 29, 2024, were $566.74 million, a decrease of 4.1% compared to $549.52 million for the same period in 2025[40] - Net income for the three months ended September 29, 2024, was $50.22 million, down from $44.25 million in 2025, representing a decline of 8.3%[40] - Net income for the nine months ended September 29, 2024, was $146,860, while for the same period in 2025, it decreased to $138,594, representing a decline of approximately 1.8%[46] - Total revenues for the nine months ended September 29, 2024, were $1,672,219, which decreased to $1,633,917 in 2025, reflecting a decline of approximately 2.3%[46] Adjusted Metrics - Adjusted EBITDA increased by 2.1% to $138.0 million, driven by lower advertising spend and reduced general and administrative expenses[5] - Adjusted EBITDA for the nine months ended September 29, 2024, was not explicitly stated but is a key performance measure used by the Company for benchmarking[27] - Adjusted EBITDA for the nine months ended September 29, 2024, was $406,108, slightly increasing to $409,195 in 2025, indicating a growth of about 0.5%[46] Cash Flow and Liquidity - Free cash flow outlook was increased by $35 million to a range of $195 to $210 million for the year[18] - Free cash flow for the nine months ended September 29, 2024, was $213,036, which decreased to $195,605 in 2025, a reduction of about 8.2%[54] - The company reported a net cash provided by operating activities of $286,681 for the nine months ended September 29, 2024, which decreased to $275,263 in 2025, a decline of about 4.0%[54] - The company experienced a net cash used in investing activities of $(68,796) in 2024, which increased to $(100,559) in 2025, indicating a significant increase in cash outflow of approximately 46.1%[54] - The company’s cash, cash equivalents, and restricted cash at the end of the period decreased from $554,529 in 2024 to $352,015 in 2025, a decline of about 36.5%[54] Shareholder Returns - The company returned $40.7 million to shareholders through dividends and share repurchases in the third quarter[4] - The company repurchased common stock amounting to $60,056 in the nine months ended September 29, 2024, which surged to $200,766 in 2025, reflecting an increase of approximately 234.5%[54] Operational Developments - The company opened 54 new restaurants in the third quarter, bringing total openings to 172 for the year[4] - The company launched Project Fresh, a comprehensive turnaround plan focused on brand revitalization and operational excellence[3] Asset and Liability Changes - The Company’s total assets decreased from $5.03 billion as of December 29, 2024, to $4.98 billion as of September 28, 2025[41] - Current liabilities increased significantly from $397.63 million to $793.73 million over the same period, indicating a potential liquidity concern[41] - The number of shares used to calculate diluted income per share decreased from 204.25 million in 2024 to 191.25 million in 2025[40] - The Company’s retained earnings increased from $399.70 million to $435.29 million, reflecting a positive trend in accumulated profits[41] Franchise and Advertising Revenue - The Company reported a decrease in franchise royalty revenue to $127.81 million for the three months ended September 28, 2025, from $132.60 million in the previous year[40] - The company’s advertising funds revenue for the nine months ended September 29, 2024, was $(343,162), which decreased to $(318,738) in 2025, a reduction of approximately 7.1%[46] Restaurant Performance - U.S. Company-operated restaurant margin decreased to 13.1%, down 2.5% from the previous year due to commodity inflation and labor costs[5] - Same-restaurant sales growth is calculated on a constant currency basis, excluding the impact of foreign currency translation, to provide better year-over-year comparability[36]