Group 1: Company Strategy and Performance - Wendy's plans to close 5% to 6% of its 5,959 U.S. restaurants, equating to approximately 298 to 358 locations, in the first half of the year as part of its turnaround strategy called Project Fresh [4] - The company reported a decline of 11.3% in same-store sales in the U.S. for the October to December quarter [1] - Interim CEO Ken Cook emphasized the need to shift focus towards value to attract customers who are feeling the strain of higher living costs [4][8] Group 2: Competitive Landscape - Competitors like McDonald's have successfully increased U.S. sales by 6.8% in the fourth quarter by focusing on value and affordability [8] - Wendy's has introduced a new permanent value menu called "Biggie Deals," featuring customization options at three price points: $4, $6, and $8 [8] - The company aims to restore relevance and rebuild trust with customers through disciplined execution and marketing in 2026, which is designated as a "rebuilding year" [9]

Core Insights - Wendy's is closing several hundred U.S. restaurants and shifting focus towards value offerings after a disappointing fourth quarter performance [1][2] Group 1: Sales Performance - Wendy's global same-store sales fell 10% in the fourth quarter, worse than the 8.5% decline expected by analysts [1] - U.S. same-store sales also declined, with Wendy's closing 28 restaurants in the fourth quarter, ending 2025 with 5,969 locations [2] - The company anticipates closing 5% to 6% of its U.S. restaurants, equating to 298 to 358 locations, in the first half of this year [2] Group 2: Strategic Changes - Wendy's plans to close 240 U.S. locations in 2024, citing that many are outdated [3] - The company aims to emphasize value to attract inflation-weary customers, similar to competitors like McDonald's and Taco Bell [3] Group 3: New Initiatives - Wendy's interim CEO Ken Cook acknowledged that the company had focused too much on limited-time promotions rather than everyday value [4] - In January, Wendy's launched a permanent "Biggie Deals" value menu with three price tiers: $4 Biggie Bites, $6 Biggie Bags, and $8 Biggie Bundles [4] - New product offerings, including a new chicken sandwich, are expected to be introduced this year [4] Group 4: Financial Overview - Wendy's revenue decreased by 5.5% in the fourth quarter to $543 million, slightly above the $537 million forecast by analysts [5] - The company is optimistic that its U.S. turnaround plans and international growth will help stabilize sales, projecting flat global systemwide sales for the year [5] - Systemwide sales fell by 3.5% last year, but Wendy's shares rose nearly 5% in mid-day trading following the announcement [5]

Financial Data and Key Metrics Changes - Global system-wide sales declined 8.3% in Q4, driven by a significant drop in U.S. sales and a tough comparison with the previous year's SpongeBob collaboration [7][30] - Total company adjusted EBITDA was $113.3 million, and adjusted EPS was $0.16 for the fourth quarter [8][33] - For the full year 2025, global system-wide sales decreased by 3.5%, highlighting the need for operational and marketing changes [8][9] Business Line Data and Key Metrics Changes - U.S. same-restaurant sales fell 11.3% in Q4, primarily due to reduced marketing spend and traffic decline, although average check increased [30] - U.S. company-operated restaurants outperformed the broader U.S. system by 410 basis points, driven by operational improvements [30] - International business saw system-wide sales growth of 6.2% in Q4, marking its 21st consecutive quarter of growth [7][32] Market Data and Key Metrics Changes - International expansion remains a priority, with 59 new locations opened in Q4, contributing to an 8.1% increase in system-wide sales for the full year [8][10] - The company achieved net unit growth of over 9% internationally, with 121 new restaurants opened in 2025 [10] Company Strategy and Development Direction - The company is implementing "Project Fresh," focusing on brand revitalization, operational excellence, system optimization, and disciplined capital allocation [12][13] - The strategy aims to restore Wendy's as the highest quality choice in the QSR sector, with a focus on improving customer engagement and menu offerings [15][17] - The company is shifting its marketing approach to emphasize everyday value rather than limited-time promotions, with new platforms like Biggie Deals [16][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2025 was a challenging year but emphasizes the importance of laying a foundation for future growth [8][12] - The outlook for 2026 is a rebuilding year, with expectations for flat global system-wide sales and improved U.S. same-restaurant sales as initiatives take effect [26][28] - The company anticipates adjusted EBITDA between $460 million and $480 million for 2026, reflecting the impact of system optimization and increased G&A expenses [28][37] Other Important Information - The company returned $330 million to shareholders through dividends and share repurchases, an increase of over $48 million from the prior year [11][34] - The company generated $205 million of free cash flow for the full year, enabling strategic investments while returning capital to shareholders [11][34] Q&A Session Summary Question: Insights on marketing and menu initiatives for the turnaround - Management expressed confidence in the turnaround plan, emphasizing the importance of brand revitalization and operational excellence [47] Question: Details on customer segmentation study findings - The study revealed that many customers seek quality upgrades, particularly in hamburgers, and highlighted the importance of snacking occasions [58] Question: Sentiment among franchisees regarding the turnaround strategy - Franchisees appreciate the flexibility and communication from management, recognizing the need for improved franchisee economics [76]

Financial Data and Key Metrics Changes - Global system-wide sales declined 8.3% in Q4, driven primarily by the U.S. business, with U.S. same-restaurant sales down 11.3% [7][31] - Total adjusted revenue for Q4 was $439.6 million, a decrease of $19.7 million compared to the prior year [34] - Adjusted EBITDA was $113.3 million, down $24.2 million versus the prior year [34] Business Line Data and Key Metrics Changes - U.S. company-operated restaurant margin was 12.7%, declining due to lower traffic and inflation [34] - International business saw system-wide sales growth of 6.2% in Q4, marking its 21st consecutive quarter of growth [7][33] - U.S. digital sales grew 2% year-over-year, with the digital mix reaching an all-time high of 20.6% in Q4 [32] Market Data and Key Metrics Changes - International expansion remains a priority, with 59 new locations opened in Q4, contributing to strong sales in markets like Canada and Mexico [8][10] - The company anticipates continued robust net unit growth in international markets, expecting a similar number of new units in 2026 as in 2025 [29] Company Strategy and Development Direction - The company is focused on Project Fresh, which includes brand revitalization, operational excellence, system optimization, and disciplined capital allocation [12][13] - A new marketing and menu approach is being implemented, emphasizing everyday value and quality, with a structured calendar for new product launches [16][19] - The company plans to close approximately 5%-6% of U.S. restaurants to optimize performance and improve franchisee economics [25][75] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2025 was a challenging year but emphasizes the importance of laying a foundation for future growth [8][12] - The outlook for 2026 is a rebuilding year, with expectations for global system-wide sales to be approximately flat and U.S. same-restaurant sales to improve throughout the year [28][29] - Management is optimistic about the operational improvements and customer satisfaction scores, which are expected to drive better performance [9][20] Other Important Information - The company returned $330 million to shareholders through dividends and share repurchases, an increase of over $48 million from the prior year [11][36] - Free cash flow for the full year was $205 million, enabling strategic investments while returning capital to shareholders [11][36] Q&A Session Summary Question: Insights on marketing and menu initiatives for the turnaround - Management expressed confidence in the turnaround plan, emphasizing the importance of brand revitalization and operational excellence [50] Question: Details on customer segmentation study findings - The study revealed that many customers seek quality upgrades, particularly in hamburgers, and highlighted the importance of snacking occasions [61] Question: Sentiment among franchisees regarding the turnaround strategy - Franchisees appreciate the flexibility and communication from management, recognizing the need for improved franchisee economics [80]

Financial Data and Key Metrics Changes - Global system-wide sales declined by 8.3% in Q4 2025, primarily due to a decrease in U.S. sales and lower marketing spend [5][28] - Adjusted EBITDA for the quarter was $113.3 million, down $24.2 million compared to the prior year [6][31] - Adjusted EPS was $0.16 in Q4 2025, reflecting the challenges faced during the year [6][31] - For the full year 2025, global system-wide sales decreased by 3.5%, indicating a need for operational and marketing improvements [6][28] Business Line Data and Key Metrics Changes - U.S. same-restaurant sales fell by 11.3% in Q4 2025, driven by reduced traffic and lower marketing effectiveness [28] - U.S. company-operated restaurant margins were 12.7%, a decline attributed to traffic decreases and inflation [31] - International business saw system-wide sales growth of 6.2% in Q4 2025, marking its 21st consecutive quarter of growth [5][30] Market Data and Key Metrics Changes - The international segment achieved an 8.1% increase in system-wide sales for the full year, with significant growth in regions like Asia Pacific and Latin America [9][30] - The company opened 59 new international locations in Q4 2025, contributing to a total of 159 new openings for the year [6][9] Company Strategy and Development Direction - The company is focused on Project Fresh, a turnaround strategy centered on brand revitalization, operational excellence, system optimization, and disciplined capital allocation [12][25] - The strategy aims to improve customer experience and franchisee economics while enhancing the quality of food offerings [12][25] - The company plans to prioritize everyday value offerings and innovate its menu, particularly in hamburgers and chicken products [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 was a challenging year but emphasized the importance of laying a foundation for future growth [6][11] - The outlook for 2026 anticipates flat global system-wide sales, with expectations for U.S. same-restaurant sales to improve as Project Fresh initiatives take effect [25][26] - Management expressed confidence in the brand's potential and the effectiveness of the turnaround plan, highlighting the importance of operational execution [40] Other Important Information - The company generated $205 million in free cash flow for the full year 2025 and returned $330 million to shareholders through dividends and share repurchases [10][32] - The company expects to close approximately 5%-6% of U.S. restaurants as part of its system optimization efforts, which will impact sales and EBITDA [22][69] Q&A Session Summary Question: How will marketing and menu initiatives evolve in 2026? - Management highlighted the importance of revitalizing the brand and improving operational excellence, with a new menu calendar framework to ensure consistent engagement with customers [44][46] Question: What insights were gained from the customer segmentation study? - The study validated the importance of quality and everyday upgrades, leading to a renewed focus on hamburgers and snacking occasions [55][57] Question: What is the current sentiment among franchisees regarding the turnaround strategy? - Franchisees appreciate the flexibility and communication from management, recognizing the need for collaboration to improve overall economics [74][75]

Core Viewpoint - Wendy's is facing challenges in its U.S. market, with a focus on regaining customer loyalty and improving sales performance [1][2]. Group 1: Sales Performance - U.S. same-store sales decreased by 4.7%, contributing to a systemwide drop of 4.4% in same-store sales during the third quarter [2]. - The company is experiencing pressure on sales and is urgently working to return to growth in U.S. comparable sales [2]. Group 2: Strategic Initiatives - Wendy's is implementing a turnaround plan called Project Fresh, which includes closing underperforming locations to concentrate resources on stronger restaurants [4][6]. - The company aims to prioritize growing average unit volumes (AUV) over net unit growth, which is part of its strategic shift [6]. Group 3: Customer Experience and Value - Wendy's is enhancing the customer experience through three key initiatives: understanding customers better, simplifying operations, and collaborating closely with franchisees [4]. - The chain has introduced new Biggie Deals to provide more value for cost-conscious customers, as traditional meal deals have become more expensive [8].

Core Insights - Wendy's has revamped its value menu with the introduction of "Biggie Deals," aimed at attracting budget-conscious consumers by offering customizable meal options at three price points: $4, $6, and $8 [1][3][12] - This move aligns with industry trends as competitors like McDonald's have also enhanced their value offerings to drive customer traffic [5][6] Company Strategy - The new value menu includes options such as $4 Biggie Bites, $6 Biggie Bag, and $8 Biggie Bundle, allowing customers to choose from various items [1][12] - Wendy's U.S. Chief Marketing Officer emphasized the importance of customization and value in attracting customers [3] Industry Context - The fast-food industry is currently experiencing a competitive landscape where companies are responding to low consumer sentiment by enhancing value propositions [8][9] - McDonald's has recently reintroduced its Extra Value Meals, which offer significant savings compared to purchasing items separately, prompting other chains to follow suit [5][10]