The Wendy’s Company (WEN) Q1 2026 earnings summary

Executive summary

• Global systemwide sales declined 5.5% year-over-year to $3.22 billion, mainly due to a 7.8% drop in U.S. same-restaurant sales, while international systemwide sales grew 6.0%.

• Net income fell 42% to $22.7 million, and adjusted EBITDA dropped 10.6% to $111.3 million, reflecting higher costs and lower margins.

• Project Fresh turnaround strategy is underway, focusing on brand revitalization, operational excellence, system optimization, and capital allocation.

• Signed a major franchise agreement to open up to 1,000 restaurants in China over 10 years, marking the largest development deal in company history.

• Digital sales rose to 23.6% of global systemwide sales, up from 20.3% in Q1 2025.

Financial highlights

• Total revenues increased 3.3% year-over-year to $540.6 million, driven by higher franchise fees, advertising revenue, and new restaurant development.

• Adjusted EBITDA was $111.3 million, down $13.2 million year-over-year, and adjusted EPS was $0.12 for the quarter.

• Free cash flow was $36.5 million, down $31.5 million year-over-year, mainly due to timing of vendor payments and lower EBITDA.

• U.S. company-operated restaurant margin declined 340 basis points to 11.4%, impacted by lower traffic and inflationary pressures.

• Operating profit fell 21.9% to $64.9 million.

Outlook and guidance

• Maintaining full-year 2026 outlook: global systemwide sales expected to be flat, with sequential quarterly improvement anticipated.

• Adjusted EBITDA guidance for 2026 is $460–$480 million; adjusted EPS expected between $0.56 and $0.60.

• Free cash flow projected at $190–$205 million; capital expenditures and franchise development fund investments expected at $120–$130 million.

• Sufficient liquidity is expected for the next 12 months, with $362 million in cash and access to a $300 million revolving facility.

• U.S. company-operated restaurant margin outlook is 13% ±50 bps, with 4% labor and commodity inflation.