Core Viewpoint - Wendy's is facing challenges in the competitive fast-food industry, leading to plans for closing a significant number of U.S. locations due to declining domestic sales [2][5]. Group 1: Company Actions - Wendy's plans to close hundreds of its U.S. restaurants, which represents about 5% to 6% of its total locations in the country [2][5]. - The company is responding to declining domestic sales as highlighted in its fourth-quarter earnings report [2]. Group 2: Stock Performance - Wendy's stock price was trading at $7.48, with a recent price target set at $7 by Morgan Stanley, indicating a potential decrease of about -6.42% [1]. - The stock has shown volatility, with a trading range between $7.08 and $7.93 on a recent trading day [3]. - Over the past year, Wendy's stock has experienced a high of $16.20 and a low of $7.08, reflecting ongoing efforts to navigate sales challenges [3]. Group 3: Market Metrics - Wendy's market capitalization is approximately $1.42 billion, indicating the total market value of its outstanding shares [4]. - The trading volume on the NASDAQ exchange is 19.22 million shares, showing active investor interest [4][5].

Group 1: Company Strategy and Performance - Wendy's plans to close 5% to 6% of its 5,959 U.S. restaurants, equating to approximately 298 to 358 locations, in the first half of the year as part of its turnaround strategy called Project Fresh [4] - The company reported a decline of 11.3% in same-store sales in the U.S. for the October to December quarter [1] - Interim CEO Ken Cook emphasized the need to shift focus towards value to attract customers who are feeling the strain of higher living costs [4][8] Group 2: Competitive Landscape - Competitors like McDonald's have successfully increased U.S. sales by 6.8% in the fourth quarter by focusing on value and affordability [8] - Wendy's has introduced a new permanent value menu called "Biggie Deals," featuring customization options at three price points: $4, $6, and $8 [8] - The company aims to restore relevance and rebuild trust with customers through disciplined execution and marketing in 2026, which is designated as a "rebuilding year" [9]

Core Insights - Wendy's is facing significant challenges in the fast-food burger market, particularly in the U.S., where it holds the number-two position behind McDonald's [1] - The company reported a global system-wide sales decline of 8.3% on a constant currency basis and an 11.3% decline in U.S. same-restaurant sales, attributed to reduced marketing spend and decreased customer traffic [2] - The severe 11.3% decline in same-store sales indicates a substantial loss of customer visits, prompting the need for strategic reassessment of store operations [3] Sales Performance - The decline in U.S. same-restaurant sales was primarily driven by decreased customer traffic, although there was a partial offset from a higher average check [2] - An 11.3% same-store sales decline is considered severe in the fast-food industry, typically indicating more than just routine traffic issues [3] Strategic Responses - Wendy's plans to close 5%-6% of its 5,831 U.S. restaurant locations, equating to approximately 292 to 350 underperforming units, as a response to broader challenges in same-store sales and competitive pressures [4] - The company is also scaling back its breakfast initiative, which was launched during the pandemic but has not met expectations due to changing consumer behaviors [5][6] Breakfast Initiative Challenges - Wendy's breakfast launch coincided with the onset of the Covid pandemic, which limited customer access to dining options and affected the breakfast model reliant on morning traffic [6][7] - The pandemic significantly impacted the fast-food breakfast model, as fewer people were commuting to work and stopping for meals [7]

Core Insights - Wendy's plans to close hundreds of restaurants, representing 5% to 6% of its total U.S. locations, as part of a strategy to address declining domestic performance [1][1] - The company's fourth-quarter earnings report indicates a 10.1% decline in same-store sales, with U.S. locations experiencing an 11.3% drop compared to a 2% decline in international locations [1][1] - Global systemwide sales reached $3.4 billion, reflecting an 8.3% decrease from the previous quarter [1][1] Store Closures - Wendy's initially announced the closure of several hundred U.S. stores in November 2025, with the aim to shut down approximately 300 to 360 locations this year [1][1] - The closures are part of a "system optimization" strategy to allow franchisees to focus on more profitable locations [1][1] - In the fourth quarter of 2025, 28 restaurants were closed, and the decision to close additional locations was made in collaboration with franchisees [1][1] Financial Performance - Shares of Wendy's Co. increased by about 5% in early trading on February 13, although overall stock prices are nearing lows not seen since 2013 [1][1] - The company operated around 6,000 U.S. stores before the planned closures, indicating a significant reduction in its domestic footprint [1][1] - The process of closing underperforming restaurants is expected to take time, particularly in terms of negotiating with landlords for rental income impacts [1][1]

The hamburger restaurant chain sector has a huge obstacle to clear this year, competing against the nation's most popular fast-food concept: fried chicken chains. Fried chicken dining chains, including Raising Cane's Chicken Fingers and Chick-fil-A, began 2026 as the most popular subsector of the fast-food industry, and will lead the sector if the concept continues the trend it set over the last year. Fried chicken restaurant traffic rises Traffic to fried chicken concepts rose 3% in the year ending Se ...

Core Viewpoint - Wendy's reported fourth-quarter earnings that slightly exceeded analyst expectations, but the 2026 outlook fell short of Wall Street forecasts Financial Performance - Adjusted EPS for the fourth quarter was $0.16, beating the consensus estimate of $0.15 [1] - Revenue reached $543 million, surpassing expectations of $537.55 million [1] - For full-year 2025, adjusted EPS was $0.88, down 12% from $1.00 in 2024 [4] Sales and Growth - Global systemwide sales declined 8.3% to $3.4 billion in the quarter [2] - Same-restaurant sales fell 10.1% globally and 11.3% in the United States [2] - International markets showed strength with systemwide sales increasing 6.2% in the fourth quarter and 8.1% for the full year [3] - Wendy's added 34 net new restaurants in the quarter, totaling 157 net additions for the year, representing 2.2% growth [3] Margin and Cost Factors - U.S. company-operated restaurant margin declined to 12.7% from 16.5% a year earlier due to weaker traffic, commodity cost inflation, and higher labor expenses [3] Future Guidance - For 2026, Wendy's guided to earnings per share of $0.56 to $0.60, significantly below analyst expectations of $0.85 [2] - The company projected flat global systemwide sales growth for the upcoming year [2]

Management attributed the 8.3% global system-wide sales decline in Q4 primarily to a significant reduction in U.S. marketing spend and a difficult year-over-year comparison against the prior year's SpongeBob collaboration. The 'Project Fresh' turnaround plan was introduced to address operational drift and a previous over-reliance on short-term discounting versus long-term brand building. A comprehensive consumer segmentation study revealed that Wendy's had neglected its core quality differentiator, le ...

Core Insights - Wendy's is planning to close approximately 5% to 6% of its US restaurants, translating to about 240 to 360 locations, following an 11.3% sales decline in its home market [1][10] - The company reported a 10% drop in global comparable sales for the fourth quarter, with the US market experiencing the largest decline [2][10] - Adjusted EBITDA for the fourth quarter was $113.3 million, slightly exceeding analyst expectations, while adjusted earnings per share were 16 cents, beating forecasts [4][5] Financial Performance - Revenue for the fourth quarter was $540.75 million, aligning closely with forecasts [5] - For the full year, Wendy's reported adjusted EBITDA of $522.4 million and adjusted earnings of 88 cents per share [5] - The company projected 2026 adjusted EBITDA between $460 million to $480 million and adjusted EPS of 56 cents to 60 cents, significantly below analyst expectations of about 86 cents per share [6] Market Reaction - Wendy's shares fell sharply in premarket trading due to the weak earnings outlook and restaurant closures [4][6] - By early Friday afternoon, shares rebounded by 3.65% to $7.54 after trading within a range of $7.08 to $7.93 [7] Strategic Decisions - The company emphasized a strategy of system optimization to enhance franchisee economics and customer experience [7] - Closing underperforming restaurants is aimed at allowing franchisees to focus on locations with greater potential for profitable growth [8] Customer Sentiment - Customers have expressed dissatisfaction with rising prices and perceived declines in food quality, leading to a decrease in visits to Wendy's [12][13] - Complaints include shrinking portion sizes and changes in ingredients, which have contributed to a loss of customer loyalty [12][13]

Core Insights - Wendy's plans to close hundreds of restaurants, representing 5% to 6% of its total U.S. locations, as part of a strategy to optimize its business following disappointing sales figures [1][1][1] Financial Performance - Total same-store sales for Wendy's fell by 10.1% in the last quarter, with U.S. same-store sales down 11.3%, compared to a 2% decline in international locations [1][1][1] - Global systemwide sales decreased to $3.4 billion, an 8.3% drop from the previous quarter [1][1][1] Store Closures - The company initially announced plans to close several hundred U.S. stores in November 2025, with 28 locations already closed in the fourth quarter of 2025 [1][1][1] - Wendy's expects to close between 300 and 360 locations, based on its U.S. operations of approximately 6,000 restaurants [1][1][1] - The closures are being conducted in collaboration with franchisees, who can identify underperforming locations [1][1][1] Strategic Focus - The interim CEO, Ken Cook, emphasized that the closures are part of a "system optimization" strategy to enhance franchisee profitability and overall brand performance [1][1][1] - The process of closing restaurants involves working with landlords to ensure mutually beneficial outcomes for both franchisees and the company [1][1][1]

You can find original article here Nrn. Subscribe to our free daily Nrn newsletters. Wendy’s fourth quarter wasn’t expected to be a home run. The chain struggled throughout 2025 as it navigated a bevy of leadership changes. In October, interim chief executive officer Kenneth Cook implemented a Project Fresh turnaround plan that included the targeted closure of about 5% to 6% of its U.S. system, or about 300 U.S. restaurants.  The company was also lapping a strong Q4 2024 from its successful SpongeB ...