Shares of The Wendy’s Company (Nasdaq: WEN) fell 6.5% to $6.80 in Friday afternoon trading as the fast-food chain’s disappointing 2026 financial guidance overshadowed a slight beat in fourth-quarter earnings.
The stock is currently trading near its 52-week low of $6.75, having declined approximately 46% over the past year. The recent downward trend accelerated following the company’s announcement of a “rebuilding year” and a system optimization plan that includes closing hundreds of underperforming domestic locations.
For the fourth quarter ended Dec. 28, 2025, Wendy’s reported total revenues of $543.0 million, a 5.5% decrease from $574.3 million in the prior-year period. Despite the decline, revenue narrowly exceeded the analyst consensus of $537.6 million.
Fourth-quarter adjusted earnings per share (EPS) came in at $0.16, down 36% from $0.25 a year ago but ahead of the $0.15 expected by Wall Street. Global systemwide sales dropped 8.3% to $3.4 billion, driven largely by a 11.3% plunge in U.S. same-restaurant sales.
Operating profit for the quarter fell 33.3% to $64.0 million, while adjusted EBITDA declined 17.6% to $113.3 million. U.S. company-operated restaurant margins contracted by 380 basis points to 12.7%, pressured by lower customer traffic, commodity inflation—specifically beef prices—and higher labor costs.
For the full year 2025, total revenues fell 3.1% to $2.18 billion. Full-year net income dropped 15.1% to $165.1 million, with adjusted EPS of $0.88 compared to $1.00 in 2024.
The company issued 2026 guidance that fell significantly short of market expectations. Wendy’s projects 2026 adjusted EPS between $0.56 and $0.60, well below the analyst estimate of $0.85. Global systemwide sales growth is expected to be approximately flat.
Interim CEO Ken Cook detailed “Project Fresh,” a turnaround plan focused on brand revitalization and system optimization. As part of this strategy, Wendy’s plans to close 5% to 6% of its U.S. restaurant base—roughly 300 to 360 locations—in the first half of 2026 to improve average unit volumes and franchisee economics.
International operations remained a rare bright spot, with systemwide sales growing 6.2% in the fourth quarter and 8.1% for the full year. The company added 121 net new international restaurants in 2025.
The results reflect broader macro pressures facing the Quick Service Restaurant (QSR) sector. While not a software or SaaS entity, Wendy’s faces similar headwinds to consumer-facing platforms, including decreased discretionary spending among lower-income households and intense price competition. Rival McDonald’s (NYSE: MCD) also recently noted a more cautious consumer environment, though it has maintained higher operating margins through superior scale.
Wendy’s returned $329.6 million to shareholders in 2025 and ended the year with $340 million in cash and a net leverage ratio of 4.8x.
