Wendy’s(US:WEN)2025-11-07 21:14Financial 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]