Financial Performance - Global systemwide sales declined by 1.1%[11], while global same-restaurant sales (SRS) decreased by 2.1%[11] - International systemwide sales grew by 8.9%[12], with SRS growth of 2.3%[12] - U S Company restaurant margin was 14.8%[35], a decrease of 50 basis points compared to 15.3%[35] - Adjusted EBITDA decreased by 2.6% to $124.5 million[35] from $127.8 million[35] - Adjusted EPS decreased by 13.0% to $0.20[35] from $0.23[35] - Free cash flow increased by $12 million to $68 million[38] from $56 million[38] Capital Allocation - The company returned over $173 million to shareholders through dividends and share repurchases[12] - 8.2 million shares were repurchased in Q1[39] - The company anticipates repurchasing up to an additional $25 million of shares in 2025[39] - The Q2 dividend is $0.14 per share[39] 2025 Outlook - Net unit growth is projected to be between 2% and 3%[30, 40] - Global systemwide sales growth is expected to range from -2.0% to flat[40] - Adjusted EBITDA is projected to be between $530 million and $545 million[40] - Adjusted EPS is expected to be between $0.92 and $0.98[40] - Free cash flow is projected to be between $185 million and $205 million[40] - Capital expenditures are expected to be between $100 million and $110 million[40]

Core Viewpoint - Wendy's shares rose despite disappointing first-quarter sales, with analysts providing mixed assessments on the company's performance and outlook [1][2][6]. Financial Performance - Wendy's reported first-quarter adjusted EBITDA of $124.5 million, exceeding consensus estimates of $122.1 million [2]. - Total revenue for the quarter was $523.5 million, falling short of the consensus of $526.5 million [6]. - U.S. same-store sales declined by 2.8%, worse than the expected decline of 1.6% [2]. - Global same-store sales decreased by 2.1%, also worse than the consensus of a 1% decline [6]. Guidance and Outlook - Management lowered full-year systemwide sales growth guidance to a range of -2% to flat, down from a previous projection of +2% to +3% [3]. - The earnings guidance for 2025 was reduced to 92 cents-98 cents per share, from a prior range of 98 cents-$1.02 per share [7]. - EBITDA outlook for 2025 was trimmed to $530-$545 million, below Street expectations of $546 million [11]. Analyst Ratings and Insights - Truist Securities maintained a Buy rating but reduced the price target from $17 to $16 [2]. - RBC Capital Markets reiterated a Sector Perform rating with a price target of $14, noting consumer softness impacting sales [4]. - Stephens reaffirmed an Equal-weight rating and price target of $14, highlighting the impact of deteriorating consumer sentiment [6]. - KeyBanc Capital Markets maintained a Sector Weight rating, indicating expectations of low-to-middle single-digit same-store sales growth in the current quarter [8]. - Oppenheimer reiterated a Perform rating, reflecting concerns over the uncertain macroeconomic environment [11]. Market Trends and Challenges - The decline in same-store sales was attributed to adverse weather conditions and a macro pull-back in demand [3]. - Analysts noted that the trends turned negative after a brief positive period in late February and early March [12]. - The company is planning menu innovations and brand collaborations to boost momentum in the second half of the year [9][10].

Financial Data and Key Metrics Changes - Global same restaurant sales declined by 2.1%, leading to a 1.1% decline in global system sales [9][31] - U.S. same restaurant sales decreased by 2.8%, while system-wide sales were down by 2.6% [9][31] - International same restaurant sales grew by 2.3%, with system-wide sales growth of 8.9% [10][32] - Adjusted revenue was $423.1 million, a decrease of $6.7 million year-over-year [38] - Adjusted EBITDA was $124.5 million, down $3.3 million from the previous year [38] - Adjusted earnings per share decreased to $0.20, down $0.03 from the prior year [39] Business Line Data and Key Metrics Changes - The U.S. company-operated restaurant margin was 14.8%, a contraction of 50 basis points year-over-year [34] - Global company restaurant margin was 14.3% for the first quarter [34] - The company opened 74 new restaurants globally, with over 60% of these openings occurring internationally [24] Market Data and Key Metrics Changes - International system-wide sales grew by 8.9%, with Europe and Asia Pacific, Middle East, and Africa regions leading the growth [32][33] - Canadian business grew year-over-year, benefiting from a localized supply chain [33] Company Strategy and Development Direction - The company focuses on three strategic pillars: delivering fresh food, providing exceptional customer experience, and accelerating global net unit growth [10][11] - The company plans to launch a "100 Days of Summer" campaign to enhance customer engagement and drive traffic [15][28] - The company is investing in technology to improve customer experience and operational efficiency, including digital menu boards and FreshAI order taking [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging consumer environment, particularly for households earning below $75,000, which saw significant traffic declines [81] - The company updated its full-year outlook, expecting global system-wide sales to be flat to down 2% [28][46] - Management remains confident in the company's strategy and brand strength to deliver long-term profitable growth [27][49] Other Important Information - The company returned over $173 million to shareholders through dividends and share repurchases [10] - The company plans to return up to $325 million of cash to shareholders in 2025, an increase compared to 2024 [44] Q&A Session Summary Question: Concerns about the 2025 guidance and consumer behavior - Management acknowledged consumer pressure reflected in Q1 numbers and emphasized a balanced approach to address customer needs [56][60] Question: Insights on consumer data and key metrics - Management highlighted operational excellence and accuracy as key drivers of customer satisfaction, with early positive results from initiatives [66][67] Question: Unit development outlook and franchisee demand - Management expressed confidence in unit growth, particularly in international markets, and noted a strong pipeline for 2025 and beyond [72][73] Question: Impact of weather and consumer behavior on performance - Management noted significant weather events affected Q1 performance, with a shift in consumer behavior leading to reduced demand [78][80] Question: Advertising spend and its effect on performance - Management indicated that while advertising spend was reduced, they maintained market share and focused on enhancing customer experience [90][91] Question: Effectiveness of collaborations and promotions - Management emphasized the importance of balancing core offerings with innovative collaborations to drive traffic and customer engagement [95][103]

Financial Data and Key Metrics Changes - Global same restaurant sales declined by 2.1%, leading to a 1.1% decline in global system sales [5][26] - U.S. same restaurant sales decreased by 2.8%, while system-wide sales were down by 2.6% [5][26] - International same restaurant sales grew by 2.3%, with system-wide sales growth of 8.9% [6][27] - Adjusted EBITDA was $124.5 million, a decrease of $3.3 million year-over-year [33] - Adjusted earnings per share was $0.20, down $0.03 from the prior year [34] - Free cash flow under the new definition was $68 million, improving by $12 million compared to the prior year [35] Business Line Data and Key Metrics Changes - The U.S. company-operated restaurant margin was 14.8%, a contraction of 50 basis points year-over-year [29] - International segment showed strong performance with system-wide sales growth of 8.9% [27][28] - The company opened 74 new restaurants globally, with over 60% of openings occurring internationally [20][21] Market Data and Key Metrics Changes - The consumer environment showed a decline in confidence, impacting demand negatively in March [27][78] - Traffic from households earning below $75,000 saw a high single-digit to low double-digit decline [80] - The QSR burger traffic was down mid-single digits in the first quarter, worse than expected [86] Company Strategy and Development Direction - The company is focused on three strategic pillars: delivering fresh food, providing exceptional customer experience, and accelerating global net unit growth [6][7] - The "100 Days of Summer" campaign aims to enhance customer engagement through value offerings and core innovations [11][23] - The company plans to invest in technology to improve customer experience and operational efficiency [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging consumer environment and updated the full-year outlook to reflect potential continued pressure [23][40] - The company remains committed to long-term growth despite current macroeconomic challenges [24][45] - Management expressed confidence in the brand's ability to win in the marketplace through strategic initiatives [24][56] Other Important Information - The company plans to return up to $325 million to shareholders in 2025 through dividends and share repurchases [39] - The adjusted EBITDA outlook for the full year is between $530 million and $545 million [43] - The company expects full-year global system-wide sales to range from flat to down 2% [41] Q&A Session Summary Question: Concerns about the 2025 guidance and consumer behavior - Management acknowledged the pressure on consumers and the need for a prudent approach, emphasizing confidence in upcoming initiatives like the "100 Days of Summer" campaign [52][56] Question: Insights on consumer data and key metrics - Management highlighted accuracy and hospitality as key drivers of customer satisfaction, with early results showing improvements [61][63] Question: Unit development outlook and franchisee demand - Management expressed confidence in unit growth, particularly in international markets, and noted a strong pipeline for future development [70][71] Question: Impact of advertising spend on performance - Management indicated that while advertising spend was reduced, they maintained market share and focused on enhancing customer experience to drive frequency [88] Question: Effectiveness of limited-time offers (LTOs) - Management emphasized the importance of balancing core offerings with innovative collaborations to drive traffic and customer engagement [91][95]