Wendy’s(WEN) - 2026 Q1 - Quarterly Report

Financial Performance - Global systemwide sales decreased 1.1% to $3.39 billion in the first quarter of 2025 compared to$3.45 billion in the first quarter of 2024[121] - Revenues decreased 2.1% to $523.5 million in the first quarter of 2025 compared to$534.8 million in the first quarter of 2024[121] - Global same-restaurant sales decreased 2.1%, with U.S. same-restaurant sales decreasing 2.8% and international same-restaurant sales increasing 2.3% compared to the first quarter of 2024[121] - Income before income taxes decreased 4.4% to $54.9 million in the first quarter of 2025 compared to$57.5 million in the first quarter of 2024[121] - Net income for the first quarter of 2025 was $39.2 million, down from$42.0 million in the first quarter of 2024[124] - Total revenues for the first quarter of 2025 were $523.5 million, a decrease of 2.4$534.8 million in 2024[125] Restaurant Operations - During the three months ended March 30, 2025, Wendy's added 68 net new restaurants across the system[122] - Company-operated restaurants comprised approximately 5% of the total Wendy's system as of March 30, 2025[110] - The total number of restaurants increased to 7,308 by the end of Q1 2025, with a net addition of 68 restaurants compared to the previous year[129] Sales and Margins - Global Company-operated restaurant margin was 14.3% in the first quarter of 2025, a decrease of 40 basis points compared to the first quarter of 2024[121] - U.S. same-restaurant sales for company-operated locations decreased by 1.2% in Q1 2025, compared to a decrease of 0.8% in Q1 2024[127] - The company-operated restaurant margin in the U.S. was $31.5 million, representing 14.8$145.1 million in the first quarter of 2025 from $146.6 million in the first quarter of 2024[124] - Franchise royalty revenue decreased by$4.0 million to $121.7 million in Q1 2025, primarily due to a 2.2$68.2 million in Q1 2025, up from $63.8 million in Q1 2024, primarily due to higher employee compensation[140] Other Financial Metrics - Advertising funds revenue decreased to$100.4 million in Q1 2025 from $104.9 million in Q1 2024, reflecting a net decrease in franchise same-restaurant sales[135] - The company recognized a net system optimization loss of$0.1 million in Q1 2025, consistent with the previous year[143] - Impairment of long-lived assets decreased to $1.4 million in Q1 2025 from$2.0 million in Q1 2024, attributed to lower impairment charges from certain underperforming restaurants[145] - Other operating income increased by $4.0 million to$6.3 million in Q1 2025, primarily due to a claim settlement[146] - Interest expense, net decreased by $1.0 million to$30.5 million in Q1 2025, attributed to lower interest income from amended leases[147] - The company recorded an investment loss of $1.7 million in Q1 2025 due to impairment charges on equity securities[148] Cash Flow and Financing - Cash provided by operating activities was$85.4 million in Q1 2025, down from $100.0 million in Q1 2024, primarily due to timing of marketing expense payments[165] - Cash used in financing activities rose to$179.3 million in Q1 2025, an increase of $106.7 million from Q1 2024, mainly due to higher stock repurchases[167] - The company had$389.0 million in cash, cash equivalents, and restricted cash as of March 30, 2025, with an additional $300.0 million available from a revolving financing facility[158] Tax and Share Repurchase - The effective tax rate increased to 28.6$124.1 million under the stock repurchase program during Q1 2025, with $110.9 million remaining under the authorization[160]