Wendy's Cuts Outlook As International Sales Sizzle, US Growth Stalls

Wendy’s Company WEN shares are trading higher on Friday.

The company reported second-quarter adjusted earnings per share of 29 cents, beating the analyst consensus estimate of 26 cents. Quarterly sales of $560.929 million (down 1.7% year over year) outpaced the Street view of $560.363 million.

Adjusted Revenues fell 1.3% to $449.6 million.

Also Read: Yum! Brands Opens 871 New Restaurants While Navigating A Slower Quarter

Global systemwide sales totaled $3.7 billion, down 1.8%, while international systemwide sales rose 8.7% across all regions.

“In the second quarter, we continued to expand our global footprint, adding 44 new restaurants, bringing our total additions to 118 in the first half of the year,” said Ken Cook, Interim CEO. “We’re also encouraged by the strong momentum in our International business, which delivered 8.7% systemwide sales growth in the quarter and continues to offer excellent opportunities for expansion.”

The company said it has added 26 net new restaurants and remains on track to deliver full-year net unit growth between 2%-3%.

Operating profit jumped 4.8% to $104.3 million. The increase in operating profit was primarily due to a decrease in the company’s investment in advertising spend, lower reorganization and realignment costs, and lower general and administrative expenses. 

Adjusted EBITDA increased 2.5% to $146.6 million. The increase in adjusted EBITDA was primarily driven by a decrease in the company’s investment in advertising spend, lower general and administrative expense and higher net franchise fees.

The company exited the quarter with cash and equivalents worth $450.512 million.

“In the U.S., we have work to do to improve the overall performance of the business,” Cook added. “We will continue to strengthen relationships with franchisees, improve the effectiveness of our marketing programs, and elevate the customer experience across the system.”

The company announced a quarterly cash dividend of 14 cents per share, payable on September 16.

Outlook

Wendy’s trimmed its fiscal year 2025 adjusted EPS outlook to 82 cents–89 cents (from 92 cents–98 cents), below the 95-cent consensus estimate.

Adjusted EBITDA is expected in the range of $505 million to $525 million, compared with the prior view of $530 million to $545 million.

Global systemwide sales growth is expected to decline in the range of 5%-3% compared with the prior view of flat to 2% decline.

Price Action: WEN shares are trading higher by 2.36% to $10.20 at last check Friday.

Read Next:

• McDonald’s Value-First Push Fails To Spur Multiple Expansion: Analyst

Image via Shutterstock