Second Quarter 2026
Filed Aug 7, 2026Wendy’s reports lower traffic-led sales and profit metrics, withdraws 2026 outlook, and reduces dividend to support turnaround.
Global systemwide sales, same-restaurant sales, operating profit, net income, adjusted EBITDA and earnings per share all declined, while the Company withdrew its 2026 outlook and reduced its dividend.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total RevenuesGAAP | $570.6 | – | 1.7 % |
| Adjusted Revenuesnon-GAAP | $443.2 | – | (1.4 )% |
| U.S. Company-Operated Restaurant Marginother | 13.8 % | – | (240 )bps |
| General and Administrative ExpenseGAAP | $66.2 | – | (11.3 )% |
| Operating ProfitGAAP | $79.3 | – | (24.0 )% |
| Net IncomeGAAP | $32.6 | – | (40.8 )% |
| Adjusted EBITDAnon-GAAP | $124.1 | – | (15.4 )% |
| Reported Diluted Earnings Per ShareGAAP | $0.17 | – | (41.4 )% |
| Adjusted Earnings Per Sharenon-GAAP | $0.18 | – | (37.9 )% |
| Global Systemwide Sales Growthother | (6.5)% | – | – |
| Global Same-Restaurant Sales Growthother | (6.3)% | – | – |
| Global Systemwide Salesother | $3,422.5 | – | (6.5)% |
| Global Restaurant Openings - Total / Netother | 48 / (71) | – | – |
| Global Quarter End Restaurant Countother | 7,180 | – | – |
| Year-to-Date Total RevenuesGAAP | $1,111.2 | – | 2.5 % |
| Year-to-Date Adjusted Revenuesnon-GAAP | $875.4 | – | 0.3 % |
| Year-to-Date U.S. Company-Operated Restaurant Marginother | 12.7 % | – | (290 )bps |
| Year-to-Date General and Administrative ExpenseGAAP | $139.0 | – | (8.8 )% |
| Year-to-Date Operating ProfitGAAP | $144.2 | – | (23.1 )% |
| Year-to-Date Net IncomeGAAP | $55.3 | – | (41.4 )% |
| Year-to-Date Adjusted EBITDAnon-GAAP | $235.4 | – | (13.2 )% |
| Year-to-Date Reported Diluted Earnings Per ShareGAAP | $0.29 | – | (39.6 )% |
| Year-to-Date Adjusted Earnings Per Sharenon-GAAP | $0.30 | – | (38.8 )% |
| Cash Flow from OperationsGAAP | $160.0 | – | 9.6 % |
| Free Cash Flownon-GAAP | $120.3 | – | 9.9 % |
| Year-to-Date Global Systemwide Sales Growthother | (6.0)% | – | – |
| Year-to-Date Global Same-Restaurant Sales Growthother | (6.5)% | – | – |
| Year-to-Date Global Systemwide Salesother | $6,643.4 | – | (6.0)% |
| Year-to-Date Global Restaurant Openings - Total / Netother | 98 / (217) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. Systemwide SalesLower U.S. same-restaurant sales and a decrease in the number of restaurants in the U.S. | $2,875.8 | – | (8.2)% |
| International Systemwide SalesInternational growth partially offset the decline in U.S. systemwide sales. | $546.7 | – | 3.4% |
| Global Systemwide SalesThe decrease was primarily driven by lower U.S. same-restaurant sales and a decrease in the number of restaurants in the U.S. | $3,422.5 | – | (6.5)% |
2026 outlook
- NoteThe Company is withdrawing its 2026 financial outlook.
- NoteThe Company’s new leadership is taking the opportunity to fully assess the business opportunities and formulate a comprehensive turnaround plan, including the optimal deployment of capital.
Capital returns
- The updated annualized dividend rate is $0.28 per share.
- The Company declared a quarterly cash dividend payment of $0.07 per share.
- The dividend is payable on September 15, 2026, to shareholders of record as of September 1, 2026.
- The Company did not repurchase any shares in the second quarter of 2026 and has not repurchased any shares in the third quarter of 2026 as of the date of this release.
- As of July 31, approximately $35.0 million remained available under the Company’s existing share repurchase authorization that expires in February 2027.
What drove it
- Global systemwide sales decreased 6.5%, driven by an 8.2% decline in the U.S., partially offset by 3.4% growth in international.
- U.S. same-restaurant sales decreased 7.0% and international same-restaurant sales decreased 2.3%.
- Reported revenue growth was driven by higher advertising funds revenue due to local advertising funds being reallocated to U.S. national advertising and non-recurring vendor incentives, plus higher Company-operated restaurant sales reflecting the acquisition of franchise-operated restaurants during the third quarter of 2025.
- Commodity inflation, traffic declines and labor rate inflation reduced U.S. Company-operated restaurant margin, partly offset by higher average check and labor efficiencies.
- Operating profit declined due to lower franchise royalty revenue, higher general and administrative expense, lower U.S. Company-operated restaurant margin, and lower net franchise fees.
Concerns
- Traffic, the value proposition and franchisee economics are not meeting the Company’s expectations.
- U.S. same-restaurant sales decreased 7.0% and global same-restaurant sales decreased 6.3%.
- U.S. Company-operated restaurant margin decreased by (240 )bps.
- Net income decreased (40.8 )% and reported diluted earnings per share decreased (41.4 )%.
- Net restaurant openings were negative in the U.S. and globally during the quarter.
- The Company withdrew its 2026 financial outlook.
What to watch
- Progress across the five identified turnaround areas: rebuilding a quality menu at compelling value, marketing that drives demand, operational excellence, a digital experience that builds frequency, and restaurants as an engine for growth.
- Whether actions to address traffic, value proposition and franchisee economics improve U.S. same-restaurant sales and restaurant development.
- The formulation of a comprehensive turnaround plan and the optimal deployment of capital.
- The effect of the reduced dividend and paused share repurchases on capital available for turnaround initiatives and growth.
Balance sheet and cash flow
- Net cash provided by operating activities was $160.0 million for the first half of the year.
- Free cash flow was $120.3 million for the first half of the year.
- The increase in free cash flow was driven by a decrease in cash taxes, capital expenditures, and investments associated with the Company’s franchise development fund, partially offset by lower net income adjusted for non-cash items.
Analysis
Second-quarter operating trends were weak. Global systemwide sales decreased 6.5%, reflecting an 8.2% decline in the U.S. that more than offset 3.4% international growth. U.S. same-restaurant sales decreased 7.0%, international same-restaurant sales decreased 2.3%, and global same-restaurant sales decreased 6.3%. The restaurant base also contracted, with global net restaurant openings of (71) during the quarter and a quarter-end global restaurant count of 7,180.
Reported total revenues increased to $570.6, but adjusted revenues decreased to $443.2. Management attributed reported revenue growth to advertising-fund revenue, non-recurring vendor incentives, and higher Company-operated restaurant sales following the acquisition of franchise-operated restaurants during the third quarter of 2025. Those factors were partly offset by lower franchise royalty revenue and franchise rental income, which highlights that reported revenue growth did not reflect underlying systemwide sales momentum.
Profitability declined materially. U.S. Company-operated restaurant margin fell to 13.8 % from 16.2 %, pressured by commodity inflation, traffic declines, and labor rate inflation. General and administrative expense increased to $66.2, with investments in professional services and employee compensation and benefits cited as drivers. Operating profit decreased to $79.3, net income decreased to $32.6, adjusted EBITDA decreased to $124.1, and reported diluted earnings per share decreased to $0.17.
Cash generation improved in the first half, with cash flow from operations of $160.0 and free cash flow of $120.3. The Company said the free-cash-flow increase reflected lower cash taxes, capital expenditures, and franchise development fund investments, partly offset by lower net income adjusted for non-cash items. Capital allocation is shifting toward flexibility for the turnaround: the annualized dividend rate was reduced to $0.28 per share, no shares were repurchased in the second quarter, and approximately $35.0 million remained under the existing authorization as of July 31.
New leadership withdrew the 2026 financial outlook while it assesses opportunities and formulates a comprehensive turnaround plan. Management identified menu value and quality, demand-driving marketing, operational excellence, digital frequency, and restaurant growth as the five action areas. The key reported issues are negative traffic trends, declining restaurant-level margins, lower franchise-related revenue and fees, negative net unit development, and the absence of a current financial outlook.
Management, verbatim
Wendy’s is an iconic brand with exceptional assets. Today we are clearly not performing at our potential. I returned to Wendy’s because I believe we can fix our issues and I am excited to work with our team and our franchisees to drive a strong turnaround.
Bob Wright, President and Chief Executive Officer of The Wendy’s Company
Our traffic, our value proposition and franchisee economics are not meeting our expectations. We have already begun taking action across five areas that we’ve identified to drive the turnaround: rebuilding a quality menu at compelling value, marketing that drives demand, operational excellence, a digital experience that builds frequency, and restaurants as an engine for growth.
Bob Wright, President and Chief Executive Officer of The Wendy’s Company
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported financial metrics.
- Cash balance.
- Debt balance.
- Gross margin.
- Operating cash flow for the second quarter alone.
- Free cash flow for the second quarter alone.
- Forward financial guidance ranges or targets, as the Company withdrew its 2026 financial outlook.
- Prior outlook for comparison.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.