Wendy’s Co. (NASDAQ: WEN) stock was trading in the green on Friday, after the fast-food chain reported second-quarter earnings that topped analyst expectations despite ongoing weakness in its US business.
Wendy’s shares gained 3.91% in the session, although the stock gave up most gains and was trading up 1.81% at the time of writing.
The upbeat results, coupled with continued international growth, helped offset concerns about a reduced full-year profit forecast.
Mixed sales performance with US weakness and international gains
For the second quarter ended June 29, 2025, Wendy’s posted net income of $55.1 million, or $0.29 per share, up from $54.6 million, or $0.27 per share, a year earlier.
Adjusted earnings matched the reported figure of $0.29 per share, exceeding the FactSet consensus estimate of $0.25.
Revenue fell 1.7% year-over-year to $560.9 million, though this was slightly ahead of Wall Street’s expectation of $558 million.
Global systemwide sales declined 1.8% to $3.7 billion, driven by a 3.3% drop in US systemwide sales that overshadowed an 8.7% increase in international sales.
Same-store sales fell 2.9% globally, below expectations for a 2.2% drop.
In the US, same-store sales declined 3.6%, while overseas markets posted a 1.8% gain.
Interim CEO Ken Cook acknowledged the domestic weakness, highlighting the need for improved marketing, customer experience, and franchisee engagement.
Strategic Initiatives and Shareholder Returns
During the quarter, Wendy’s added 26 net new restaurants, bringing its total to 7,334 worldwide.
The company continues to focus on international expansion, with growth reported across all global regions.
In total, 44 new restaurants were added in the second quarter, and 118 in the first half of the year.
Wendy’s also returned $88.7 million to shareholders during the quarter through dividends and share repurchases.
This included a regular quarterly dividend of $0.14 per share, payable on September 16, 2025, as well as the repurchase of 4.8 million shares for $61.9 million.
An additional 0.8 million shares were repurchased in the third quarter through August 1 for $8.8 million.
Operating profit rose 4.8% to $104.3 million, supported by reduced advertising expenses and lower general and administrative costs.
However, the company’s balance sheet remains under pressure, with debt leverage at 4.8 times the midpoint of its 2025 estimated EBITDA guidance.
Updated outlook and analyst reactions
Wendy’s lowered its 2025 adjusted earnings guidance to a range of $0.82 to $0.89 per share, down from its previous projection of $0.92 to $0.98.
Sales growth expectations were also cut, with the company now forecasting a global systemwide sales decline of 5% to 3%, compared with earlier guidance of a 2% decline to flat performance.
The company reaffirmed its target for global net unit growth of 2% to 3% and maintained its planned capital expenditures and franchise development fund investments of $165 million to $175 million.
Evercore ISI reiterated its In Line rating and $14 price target on the stock, noting that Wendy’s is undervalued at current levels but emphasizing that success in the competitive fast-food sector will require “outstanding” execution in marketing, value offerings, innovation, and technology.
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