Wendy's Q4 Earnings Beat Expectations Amid Revenue Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy WEN?
Source: seekingalpha
- Earnings Beat: Wendy's reported a Q4 non-GAAP EPS of $0.16, surpassing expectations by $0.02, indicating resilience in profitability despite overall revenue decline.
- Revenue Decline: The company posted revenue of $543 million, a 5.5% year-over-year decrease, yet it exceeded analyst expectations by $62,800, demonstrating a degree of market performance amid adversity.
- Revitalization Challenges: Analysts note that while Wendy's valuation appears attractive, the execution of its brand revitalization has become unreliable, potentially impacting future market confidence and investor sentiment.
- Market Expansion Plans: Wendy's is actively seeking to expand its presence in Mexico, a strategic move aimed at driving long-term growth through new market entry, although current fundamental challenges must be addressed.
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Analyst Views on WEN
Wall Street analysts forecast WEN stock price to rise
20 Analyst Rating
2 Buy
14 Hold
4 Sell
Hold
Current: 7.270
Low
8.00
Averages
9.39
High
11.00
Current: 7.270
Low
8.00
Averages
9.39
High
11.00
About WEN
The Wendy’s Company is primarily engaged in the business of operating, developing and franchising a system of distinctive quick-service restaurants. The Company’s menu includes made-to-order square hamburgers using beef, and fan favorites like the Spicy Chicken Sandwich and nuggets, Baconator, and the Frosty dessert. Its segments include Wendy’s U.S., Wendy’s International and Global Real Estate & Development. Wendy’s U.S. includes the operation and franchising of its restaurants in the United States. Wendy’s International includes the operation and franchising of its restaurants in countries and territories other than the United States. Global Real Estate & Development includes real estate activity for owned sites and sites leased from third parties, which are leased and/or subleased to franchisees, and also includes its share of the income of its Canadian restaurant real estate joint venture (TimWen). The Company and its franchisees have over 7,000 restaurants worldwide.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Wendy's Sales Decline and Breakfast Strategy Adjustment
- Sales Decline: Wendy's reported an 11.3% decline in U.S. same-store sales and an 8.3% drop in global system-wide sales, primarily due to significantly reduced marketing spend leading to decreased customer traffic, indicating heightened competitive pressures.
- Store Closure Plans: The company plans to close 5%-6% of its U.S. locations, translating to approximately 292 to 350 underperforming units, a move aimed at addressing ongoing sales declines and protecting franchisee profitability amidst challenging market conditions.
- Breakfast Strategy Adjustment: Although Wendy's launched its breakfast menu in 2020 to attract new customers, it has now acknowledged that some locations have struggled with breakfast sales and plans to adjust operating hours based on market demand to enhance franchisee profitability.
- Market Outlook: The U.S. fast-food industry is projected to reach $254.11 billion by 2024, with the breakfast segment expected to generate $15.6 billion in revenue by 2025, indicating potential growth opportunities despite current challenges.
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Tri Pointe to Be Acquired by Sumitomo Forestry
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- Stock Price Surge: Following the acquisition announcement, Tri Pointe's stock surged by 26%, reflecting positive investor sentiment towards the deal and optimism regarding a recovery in the real estate market.
- Delivery Outlook: Tri Pointe expects to deliver between 1,200 and 1,400 homes in Q4, demonstrating stable delivery capabilities in the current market environment, which enhances its attractiveness to investors.
- Analyst Rating Adjustments: RBC Capital lowered Tri Pointe's price target from $37 to $31, yet Citizens initiated coverage with an Outperform rating, indicating divergent views on the company's future performance in the market.
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Wendy's Q4 2025 Earnings Call Insights
- Sales Decline: Wendy's reported a global system-wide sales decline of 8.3%, primarily due to significantly reduced marketing spend in the U.S. and tough comparisons with last year's SpongeBob collaboration, which is expected to impact future profitability and market share.
- International Growth: Despite struggles in the U.S. market, international operations achieved a 6.2% increase in system-wide sales this quarter, with the opening of 59 new international locations, highlighting the company's potential and strategic importance in global expansion.
- Project Fresh Plan: The implementation of Project Fresh will involve closing 5% to 6% of U.S. locations, with completion expected in H1 2026, aimed at optimizing operations and enhancing overall profitability, although it may drag EBITDA down by $15 million to $20 million in the short term.
- Financial Outlook: Management anticipates adjusted EBITDA for 2026 to range between $460 million and $480 million, with expected adjusted EPS between $0.56 and $0.60, reflecting a cautiously optimistic stance during the rebuilding phase.
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Significant Stock Movements for Moderna and Others
- Moderna's Positive Outlook: Moderna anticipates a revenue growth of up to 10% by 2025, surpassing the FactSet consensus of 5.9%, despite reporting a narrower fourth-quarter loss of $2.11 per share compared to the expected $2.54, indicating resilience in its market position.
- Maplebear's Strong Performance: Maplebear's Instacart forecasts gross transaction value between $10.13 billion and $10.28 billion for the current quarter, exceeding the $9.97 billion StreetAccount estimate, while adjusted EBITDA is expected to be between $280 million and $290 million, reflecting improved profitability.
- Wendy's Earnings Beat: Wendy's reported adjusted earnings of 16 cents per share and revenue of $543 million for the fourth quarter, both exceeding FactSet expectations, demonstrating its sustained competitiveness in the fast-food market.
- Rivian's Upgraded Delivery Forecast: Rivian projects vehicle deliveries of 62,000 to 67,000 units in 2026, representing a 47% to 59% increase from 2025, and despite a fourth-quarter adjusted loss of 54 cents per share, revenue of $1.29 billion surpassed estimates, indicating strong market demand.
See More
Wendy's Declares Quarterly Dividend of $0.14 per Share
- Quarterly Dividend Announcement: Wendy's has declared a quarterly dividend of $0.14 per share, consistent with previous distributions, indicating the company's ongoing commitment to maintaining stable cash flows despite market challenges.
- Dividend Yield: The forward yield of 7.7% reflects the company's ability to provide relatively attractive returns to shareholders in the current economic environment, thereby bolstering investor confidence.
- Shareholder Record Dates: The dividend will be payable on March 16, with a record date of March 2 and an ex-dividend date also set for March 2, providing investors with a clear timeline for participation in the dividend distribution.
- Revitalization Challenges: While Wendy's demonstrates stability in its dividend payments, ongoing struggles in the U.S. market may impact future growth potential, with analysts expressing concerns over the company's execution capabilities in revitalizing its brand.
See More
Wendy's Q4 Earnings Exceed Expectations with Strategic Growth Plans
- Earnings Beat: Wendy's reported an adjusted EPS of 16 cents for Q4, surpassing the 14 cents estimate, with total revenues of $543 million exceeding the $535.99 million forecast, indicating resilience amid challenges.
- Sales Decline: Global systemwide sales fell to $3.4 billion, down 8.3%, yet international sales rose by 6.2%, highlighting successful expansion efforts with 121 new international restaurants added in 2025.
- Margin Pressure: The U.S. company-operated restaurant margin decreased from 16.5% to 12.7%, primarily due to declining traffic and inflation in commodities and labor, although an increase in average check provided some offset, reflecting ongoing cost control challenges.
- Cautious Outlook: For 2026, Wendy's expects adjusted EPS between 56 to 60 cents, below the 86 cents estimate, indicating a cautious approach to future growth, while global systemwide sales growth is anticipated to remain flat.
See More
Wendy's Sales Decline and Breakfast Strategy Adjustment
- Sales Decline: Wendy's reported an 11.3% decline in U.S. same-store sales and an 8.3% drop in global system-wide sales, primarily due to significantly reduced marketing spend leading to decreased customer traffic, indicating heightened competitive pressures.
- Store Closure Plans: The company plans to close 5%-6% of its U.S. locations, translating to approximately 292 to 350 underperforming units, a move aimed at addressing ongoing sales declines and protecting franchisee profitability amidst challenging market conditions.
- Breakfast Strategy Adjustment: Although Wendy's launched its breakfast menu in 2020 to attract new customers, it has now acknowledged that some locations have struggled with breakfast sales and plans to adjust operating hours based on market demand to enhance franchisee profitability.
- Market Outlook: The U.S. fast-food industry is projected to reach $254.11 billion by 2024, with the breakfast segment expected to generate $15.6 billion in revenue by 2025, indicating potential growth opportunities despite current challenges.
See More
Tri Pointe to Be Acquired by Sumitomo Forestry
- Acquisition Agreement: Tri Pointe has entered into a definitive agreement with Sumitomo Forestry, which will acquire the company for $47.00 per share in cash, valuing the transaction at approximately $4.5 billion, indicating a rebound in market confidence in the real estate sector.
- Stock Price Surge: Following the acquisition announcement, Tri Pointe's stock surged by 26%, reflecting positive investor sentiment towards the deal and optimism regarding a recovery in the real estate market.
- Delivery Outlook: Tri Pointe expects to deliver between 1,200 and 1,400 homes in Q4, demonstrating stable delivery capabilities in the current market environment, which enhances its attractiveness to investors.
- Analyst Rating Adjustments: RBC Capital lowered Tri Pointe's price target from $37 to $31, yet Citizens initiated coverage with an Outperform rating, indicating divergent views on the company's future performance in the market.
See More
Wendy's Q4 2025 Earnings Call Insights
- Sales Decline: Wendy's reported a global system-wide sales decline of 8.3%, primarily due to significantly reduced marketing spend in the U.S. and tough comparisons with last year's SpongeBob collaboration, which is expected to impact future profitability and market share.
- International Growth: Despite struggles in the U.S. market, international operations achieved a 6.2% increase in system-wide sales this quarter, with the opening of 59 new international locations, highlighting the company's potential and strategic importance in global expansion.
- Project Fresh Plan: The implementation of Project Fresh will involve closing 5% to 6% of U.S. locations, with completion expected in H1 2026, aimed at optimizing operations and enhancing overall profitability, although it may drag EBITDA down by $15 million to $20 million in the short term.
- Financial Outlook: Management anticipates adjusted EBITDA for 2026 to range between $460 million and $480 million, with expected adjusted EPS between $0.56 and $0.60, reflecting a cautiously optimistic stance during the rebuilding phase.
See More
Significant Stock Movements for Moderna and Others
- Moderna's Positive Outlook: Moderna anticipates a revenue growth of up to 10% by 2025, surpassing the FactSet consensus of 5.9%, despite reporting a narrower fourth-quarter loss of $2.11 per share compared to the expected $2.54, indicating resilience in its market position.
- Maplebear's Strong Performance: Maplebear's Instacart forecasts gross transaction value between $10.13 billion and $10.28 billion for the current quarter, exceeding the $9.97 billion StreetAccount estimate, while adjusted EBITDA is expected to be between $280 million and $290 million, reflecting improved profitability.
- Wendy's Earnings Beat: Wendy's reported adjusted earnings of 16 cents per share and revenue of $543 million for the fourth quarter, both exceeding FactSet expectations, demonstrating its sustained competitiveness in the fast-food market.
- Rivian's Upgraded Delivery Forecast: Rivian projects vehicle deliveries of 62,000 to 67,000 units in 2026, representing a 47% to 59% increase from 2025, and despite a fourth-quarter adjusted loss of 54 cents per share, revenue of $1.29 billion surpassed estimates, indicating strong market demand.
See More
Wendy's Declares Quarterly Dividend of $0.14 per Share
- Quarterly Dividend Announcement: Wendy's has declared a quarterly dividend of $0.14 per share, consistent with previous distributions, indicating the company's ongoing commitment to maintaining stable cash flows despite market challenges.
- Dividend Yield: The forward yield of 7.7% reflects the company's ability to provide relatively attractive returns to shareholders in the current economic environment, thereby bolstering investor confidence.
- Shareholder Record Dates: The dividend will be payable on March 16, with a record date of March 2 and an ex-dividend date also set for March 2, providing investors with a clear timeline for participation in the dividend distribution.
- Revitalization Challenges: While Wendy's demonstrates stability in its dividend payments, ongoing struggles in the U.S. market may impact future growth potential, with analysts expressing concerns over the company's execution capabilities in revitalizing its brand.
See More
Wendy's Q4 Earnings Exceed Expectations with Strategic Growth Plans
- Earnings Beat: Wendy's reported an adjusted EPS of 16 cents for Q4, surpassing the 14 cents estimate, with total revenues of $543 million exceeding the $535.99 million forecast, indicating resilience amid challenges.
- Sales Decline: Global systemwide sales fell to $3.4 billion, down 8.3%, yet international sales rose by 6.2%, highlighting successful expansion efforts with 121 new international restaurants added in 2025.
- Margin Pressure: The U.S. company-operated restaurant margin decreased from 16.5% to 12.7%, primarily due to declining traffic and inflation in commodities and labor, although an increase in average check provided some offset, reflecting ongoing cost control challenges.
- Cautious Outlook: For 2026, Wendy's expects adjusted EPS between 56 to 60 cents, below the 86 cents estimate, indicating a cautious approach to future growth, while global systemwide sales growth is anticipated to remain flat.
See More
