Third Quarter 2026
Filed Nov 5, 2026The Wendy’s Company reports third-quarter revenue of $547.0 million, net income of $15.1 million and adjusted EBITDA of $113.4 million as global systemwide sales decreased 5.9%.
Global systemwide sales, U.S. same-restaurant sales, operating profit, net income, adjusted EBITDA and both reported and adjusted EPS declined year over year. Revenue was broadly stable, while strategic initiative expenses, traffic pressure, labor-rate inflation and commodity inflation weighed on profitability.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenues, third quarterGAAP | $547M | – | (0.5 )% |
| Adjusted revenues, third quarternon-GAAP | $435.6M | – | (1.6 )% |
| Sales revenue, third quarterGAAP | $ 234,865 | – | – |
| Franchise royalty revenue, third quarterGAAP | $ 119,415 | – | – |
| Franchise fees, third quarterGAAP | $ 22,885 | – | – |
| Franchise rental income, third quarterGAAP | $ 58,455 | – | – |
| Advertising funds revenue, third quarterGAAP | $ 111,373 | – | – |
| U.S. Company-operated restaurant margin, third quarterother | 11.7 % | – | (140 )bps |
| General and administrative expense, third quarterGAAP | $73.1M | – | (26.3 )% |
| Operating profit, third quarterGAAP | $55.8M | – | (39.3 )% |
| Net income, third quarterGAAP | $15.1M | – | (65.9 )% |
| Adjusted EBITDA, third quarternon-GAAP | $113.4M | – | (17.8 )% |
| Reported diluted earnings per share, third quarterGAAP | $0.08 | – | (65.2 )% |
| Adjusted earnings per share, third quarternon-GAAP | $0.13 | – | (45.8 )% |
| Total revenues, year-to-dateGAAP | $1.66B | – | 1.5 % |
| Adjusted revenues, year-to-datenon-GAAP | $1.31B | – | (0.3 )% |
| U.S. Company-operated restaurant margin, year-to-dateother | 12.3 % | – | (240 )bps |
| General and administrative expense, year-to-dateGAAP | $212.1M | – | (14.3 )% |
| Operating profit, year-to-dateGAAP | $200M | – | (28.4 )% |
| Net income, year-to-dateGAAP | $70.4M | – | (49.2 )% |
| Adjusted EBITDA, year-to-datenon-GAAP | $348.8M | – | (14.8 )% |
| Reported diluted earnings per share, year-to-dateGAAP | $0.37 | – | (47.9 )% |
| Adjusted earnings per share, year-to-datenon-GAAP | $0.43 | – | (41.1 )% |
| Net cash provided by operating activities, year-to-dateGAAP | $239M | – | (13.2 )% |
| Free cash flow, year-to-datenon-GAAP | $174.2M | – | (10.9 )% |
| Cash and cash equivalentsGAAP | $373.7M | – | – |
| Restricted cashGAAP | $39.38M | – | – |
| Current portion of long-term debtGAAP | $29.75M | – | – |
| Long-term debtGAAP | $2.71B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. systemwide sales, third quarterLower U.S. same-restaurant sales and a decrease in the number of restaurants in the U.S. | $2.78B | – | (7.6)% |
| International systemwide sales, third quarterInternational systemwide sales growth partially offset the U.S. decline. | $549.4M | – | 3.5% |
| Global systemwide sales, third quarterLower U.S. same-restaurant sales and a decrease in the number of restaurants in the U.S. | $3.33B | – | (5.9)% |
| U.S. systemwide sales, year-to-dateU.S. same-restaurant sales decreased 6.8% year-to-date. | $8.36B | – | (7.7)% |
| International systemwide sales, year-to-dateInternational same-restaurant sales decreased 1.6% year-to-date. | $1.61B | – | 4.3% |
| Global systemwide sales, year-to-dateGlobal same-restaurant sales decreased 6.1% year-to-date. | $9.97B | – | (6.0)% |
Capital returns
- The Company declared a quarterly cash dividend payment of $0.07 per share, payable on December 15, 2026, to shareholders of record as of December 1, 2026.
- The Company did not repurchase any shares in the third quarter of 2026 and has not repurchased any shares in the fourth quarter of 2026 as of the date of this release.
- Approximately $35.0 million remains available under the existing share repurchase authorization that expires in February 2027.
- Repurchases of common stock were $ 1,922 for the nine months ended September 27, 2026, compared with $ 200,766 for the nine months ended September 28, 2025.
- Dividends were $ 66,687 for the nine months ended September 27, 2026, compared with $ 102,954 for the nine months ended September 28, 2025.
What drove it
- U.S. same-restaurant sales decreased 5.7%, international same-restaurant sales decreased 2.2%, and global same-restaurant sales decreased 5.2% in the third quarter.
- Total reported revenues decreased $2.5 million, or 0.5%, primarily from lower franchise royalty revenue, partially offset by higher advertising funds revenue and higher Company-operated restaurant sales reflecting the acquisition of franchise-operated restaurants during the third quarter of 2025.
- U.S. Company-operated restaurant margin decreased 140 basis points due to a decline in traffic, labor rate inflation and commodity inflation, partially offset by an increase in average check and labor efficiencies.
- General and administrative expense increased $15.2 million, or 26.3%, primarily due to strategic initiative expenses in the current year and lower share-based compensation in the prior year.
- Operating profit declined primarily due to higher general and administrative expense, lower net franchise fees resulting from an increase in the provision for doubtful accounts, lower franchise royalty revenue and higher reorganization and realignment costs related to portfolio optimization.
- The Company revised its breakfast strategy to be location specific following tests that yielded significant profit improvement.
- The Company signed a letter-of-intent with Meritage Hospitality Group and its lenders to acquire up to 163 Wendy’s restaurants, subject to a definitive agreement, better and higher offers and court approval of the transaction.
Concerns
- Global systemwide sales decreased 5.9% in the third quarter, including a 7.6% decline in the U.S.
- U.S. same-restaurant sales decreased 5.7%, international same-restaurant sales decreased 2.2%, and global same-restaurant sales decreased 5.2% in the third quarter.
- Net income decreased 65.9% to $15.1 million, while reported diluted earnings per share decreased 65.2% to $0.08.
- Adjusted EBITDA decreased 17.8% to $113.4 million and adjusted earnings per share decreased 45.8% to $0.13.
- U.S. Company-operated restaurant margin declined 140 basis points to 11.7%.
- Third-quarter general and administrative expense increased 26.3% to $73.1 million.
- Third-quarter restaurant openings were 13 / (13) in the U.S. and 43 / 14 globally; quarter-end U.S. restaurant count was 5,711 compared with 5,979 in the prior-year quarter.
What to watch
- Execution and early performance of Dave’s Way, which is focused on growing customer traffic and market share while strengthening restaurant profitability.
- Whether the location-specific breakfast strategy delivers the stated significant profit improvement from testing and whether it can unlock up to $200 million in restaurant-level EBITDA across the system.
- U.S. traffic, average check, labor efficiencies, labor rate inflation and commodity inflation, all of which affected U.S. Company-operated restaurant margin.
- Progress of portfolio optimization actions, including planned Company restaurant acquisitions and transfers of franchised restaurants to well-capitalized, high-performing operators.
- The definitive agreement, better and higher offers and court approval associated with the proposed acquisition of up to 163 Meritage restaurants.
- The pace of U.S. restaurant count change, following third-quarter U.S. net restaurant openings of (13).
Balance sheet and cash flow
- Cash and cash equivalents were $ 373,704 as of September 27, 2026, compared with $ 300,833 as of December 28, 2025.
- Restricted cash was $ 39,381 as of September 27, 2026, compared with $ 39,207 as of December 28, 2025.
- Long-term debt was $ 2,712,727 as of September 27, 2026, compared with $ 2,730,502 as of December 28, 2025.
- Net cash provided by operating activities was $ 238,950 for the nine months ended September 27, 2026, compared with $ 275,263 for the nine months ended September 28, 2025.
- Capital expenditures were $ 48,724 for the nine months ended September 27, 2026, compared with $ 64,043 for the nine months ended September 28, 2025.
- Franchise development fund expenditures were $ 14,588 for the nine months ended September 27, 2026, compared with $ 23,096 for the nine months ended September 28, 2025.
- Proceeds from long-term debt were $ 54,850 and repayments of long-term debt were $ 77,163 for the nine months ended September 27, 2026.
Analysis
Wendy’s reported a weak third quarter, with global systemwide sales decreasing 5.9% as U.S. systemwide sales decreased 7.6%. U.S. same-restaurant sales decreased 5.7%, international same-restaurant sales decreased 2.2%, and the U.S. restaurant count fell to 5,711 from 5,979 in the prior-year quarter. International systemwide sales growth of 3.5% was not sufficient to offset the U.S. contraction.
Reported revenue was comparatively resilient at $547.0 million, down 0.5%, but the composition was unfavorable. Lower franchise royalty revenue was only partly offset by higher advertising funds revenue and higher Company-operated restaurant sales. Adjusted revenues decreased 1.6% to $435.6 million. The gap between systemwide sales performance and reported revenue reflects the importance of franchise revenue streams and the effects of Company-operated restaurant acquisitions.
Profitability deteriorated sharply. U.S. Company-operated restaurant margin declined 140 basis points to 11.7%, with traffic declines, labor rate inflation and commodity inflation more than offsetting higher average check and labor efficiencies. General and administrative expense increased 26.3% to $73.1 million, including strategic initiative expenses. Operating profit fell 39.3% to $55.8 million, net income fell 65.9% to $15.1 million, and adjusted EBITDA fell 17.8% to $113.4 million.
Year-to-date liquidity remained positive, with $239.0 million of net cash provided by operating activities and $174.2 million of free cash flow, although both declined from the prior-year period. Cash and cash equivalents were $ 373,704, while long-term debt was $ 2,712,727. The Company declared a $0.07 per-share quarterly dividend, made no third-quarter share repurchases, and had approximately $35.0 million remaining under its repurchase authorization.
Management is directing capital and operating attention toward Dave’s Way, a location-specific breakfast strategy and portfolio optimization. The Company stated that the breakfast decision could unlock up to $200 million in restaurant-level EBITDA across the system. Investors will need to assess whether these initiatives improve customer traffic, U.S. same-restaurant sales, restaurant margins and the U.S. restaurant base while the Company advances its proposed acquisition of up to 163 Meritage restaurants.
Management, verbatim
I’m encouraged by how quickly our system has aligned around Dave’s Way , our multi-year business strategy rooted in the values and standards established by our founder.
Bob Wright, President and Chief Executive Officer of The Wendy’s Company
Dave’s Way brings our areas of focus together in one integrated strategy with a clear objective: growing customer traffic and market share while strengthening restaurant profitability.
Bob Wright, President and Chief Executive Officer of The Wendy’s Company
With approximately $413 million in cash and $174 million of free cash flow year-to-date, we are well positioned to invest in our Dave’s Way strategy.
Steve Cirulis, Chief Financial Officer and Chief Strategy Officer of The Wendy’s Company
Not in the filing
stated, not guessed- Forward financial guidance was not provided in the filing.
- Previous-period outlook was not provided; therefore, comparison of actual results with prior guidance is unavailable.
- GAAP gross margin was not reported.
- GAAP or non-GAAP tax rate was not reported.
- Prior-quarter figures for the reported third-quarter financial metrics were not provided.
- Cash and cash equivalents as of the prior-year comparable quarter were not provided.
- Long-term debt as of the prior-year comparable quarter was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.