Wendy’s (NASDAQ:WEN) executives told investors the company is entering a “rebuilding year” in 2026 after a difficult finish to fiscal 2025, outlining a turnaround plan dubbed Project Fresh focused on brand revitalization, operational excellence, system optimization, and disciplined capital allocation.
Fourth-quarter results pressured by U.S. traffic declines
Interim Chief Executive Officer and Chief Financial Officer Ken Cook said fourth-quarter results were in line with expectations, but acknowledged performance needs to improve. Global system-wide sales declined 8.3%, driven by the U.S. business. Cook attributed the weakness to significantly lower marketing spend after front-end loaded advertising earlier in 2025, sales trends throughout the year, a tough comparison to the prior-year SpongeBob collaboration, and the decision to shift the launch of new chicken sandwiches into 2026 “to ensure excellent execution.”
On profitability, Thuerk reported:
- Total adjusted revenue: $439.6 million, down $19.7 million from the prior year
- Global company-operated restaurant margin: 12.1%
- U.S. company-operated restaurant margin: 12.7%, down year-over-year due to traffic declines, commodity inflation, and labor rate inflation (partially offset by higher average check and labor efficiencies)
- Adjusted EBITDA: $113.3 million
- Adjusted EPS: $0.16
International growth remains a bright spot
While the U.S. business struggled, management pointed to continued momentum abroad. International system-wide sales increased 6.2% in the fourth quarter, marking the 21st consecutive quarter of growth, Cook said. The company opened 59 new international locations in the quarter, including in established markets such as Canada and Mexico and newer markets including Armenia and Scotland, which Cook said posted strong sales following launch.
For the full year, Cook said international system-wide sales rose 8.1% and the company opened 159 restaurants internationally. He noted net unit growth was above 9%, with 121 net new restaurants in 2025, a record for the international business. Wendy’s also entered seven new markets during the year, including Australia and Romania, expanding from 31 to 38 international markets, and signed development agreements for 338 future restaurants.
Project Fresh: brand, operations, and system footprint changes
Cook described Project Fresh as a system-wide turnaround plan designed to address marketing, menu, operations, and store footprint issues. On brand strategy, Wendy’s completed a consumer segmentation study (the first phase of an engagement with Creed UnCo) to better understand “need states” that drive visits. Cook said the findings reinforced that a major segment comes to Wendy’s for an “everyday quality upgrade,” especially hamburgers featuring fresh, never frozen beef—an area he said was underemphasized in 2025, when the company had “zero hamburger innovation.”
As part of a rebalanced 2026 marketing and menu calendar, Cook highlighted several items slated for near-term launch, including a Cheesy Bacon Cheeseburger, a Chicken Tenders Ranch Wrap, and an updated Girl Scout Thin Mint Frosty offering with swirl and fusion options. He also reiterated plans for a “new and improved” chicken sandwich lineup later in 2026, alongside quality upgrades including new buns and upgraded chicken fillets.
On value, Cook said the company moved away from relying heavily on limited-time discounting and in January launched Biggie Deals as a permanent, tiered everyday value platform priced at $4, $6, and $8.
Operationally, management emphasized that improvements in company-operated restaurants are serving as a blueprint for the broader franchise system. Cook said U.S. company-operated restaurants outperformed the U.S. system by 310 basis points in same-restaurant sales for 2025, and Thuerk said the outperformance was 410 basis points in the fourth quarter. Cook attributed the operational gains to “people activation,” enhanced training, and more methodical performance management, and said about 20% of franchisees have fully adopted the program so far, with broader adoption expected to drive more benefit in the second half of 2026.
System optimization is another key lever. Cook said Wendy’s expects approximately 5% to 6% of U.S. restaurants to close under its optimization program, including 28 closures in the fourth quarter of 2025, with the remainder expected in the first half of 2026. The company is also giving franchisees flexibility to better align operating hours to demand—particularly in the morning daypart—while maintaining that breakfast remains important to the system.
Cash flow, balance sheet actions, and 2026 outlook
In 2025, Cook said Wendy’s generated $345 million of cash flow from operations and delivered $205 million of free cash flow. The company returned $330 million to shareholders through dividends and share repurchases. Thuerk said Wendy’s repurchased 14.4 million shares for approximately $200 million through the end of fiscal 2025, and ended the year with $340 million of cash and a net leverage ratio of 4.8x.
Thuerk also said Wendy’s issued $450 million of whole business securitization notes in the fourth quarter, using proceeds to repay $50 million of debt that matured in December 2025 and refinance $350 million of securitization notes due in September 2026. The weighted average interest rate on the new notes is 5.4%.
For 2026, management’s outlook incorporates a 53rd week, expected impacts from store closures and operating hour changes, and challenging first-quarter weather. The company guided to:
- Global system-wide sales: approximately flat year-over-year
- Adjusted EBITDA: $460 million to $480 million
- Adjusted EPS: $0.56 to $0.60
- Free cash flow: $190 million to $205 million
Thuerk said the flat system-wide sales outlook reflects roughly 2% growth from base business improvements and international expansion, a 2% benefit from the 53rd week, offset by a 4% impact from system optimization initiatives. She said first-quarter U.S. same-restaurant sales are expected to be down year-over-year with sequential improvement through the year. Cook noted January ended down about 8% for U.S. same-restaurant sales amid significant weather disruption, and said the company expects the full first quarter to be “a little bit better than that.”
On capital allocation, Thuerk said Wendy’s will reduce build-to-suit investment by about $20 million versus 2025, continue to prioritize the dividend, and maintain its net leverage target range of 3.5x to 5x adjusted EBITDA, with expectations to remain near the top end in 2026. The company announced a regular quarterly dividend of $0.14 per share and said about $35 million remains on its current share repurchase authorization through February 2027.
About Wendy’s (NASDAQ:WEN)
The Wendy’s Company (NASDAQ:WEN) operates as a global quick-service restaurant chain, best known for its square-shaped beef patties, fresh ingredient sourcing and signature Frosty dessert. The company’s menu features a variety of hamburgers, chicken sandwiches, salads, breakfast sandwiches, sides and beverages, designed to appeal to a broad customer base seeking both classic and contemporary fast-food options. Wendy’s has placed particular emphasis on product innovation, introducing limited-time offerings and revamped core menu items to maintain customer interest and respond to evolving dining trends.
Founded in 1969 by entrepreneur Dave Thomas in Columbus, Ohio, Wendy’s expanded rapidly through both company-owned and franchised outlets.
