Wendy's Sizzles Abroad, But US Sales Leave Investors Cold

Wendy’s Co WEN reported a first-quarter 2025 sales decline of 2.1% year-on-year to $523.47 million, missing the analyst consensus estimate of $525.41 million.

The decrease in total revenues resulted primarily from lower company-operated restaurant sales, lower advertising funds revenue and lower franchise royalty revenue.

Adjusted revenues decreased 1.6% to $423.1 million. Systemwide sales in the U.S. declined 2.6%, and International Jumped 8.9%. Global same-restaurant sales decreased 2.1%. U.S. company-operated restaurant margin was 14.8% versus 15.3% a year ago.

Operating income for the quarter rose 2.4% Y/Y to $83.1 million. Adjusted EBITDA decreased 2.6% Y/Y to $124.5 million. Adjusted EPS of 20 cents was inline with the consensus estimate. 

Also Read: Middle-East Tensions And Consumer Uncertainty Bites McDonald’s Q1 Revenue

At the end of March, the fast food franchise held $335.2 million in cash and equivalents. Operating cash flow for the quarter totaled $85.4 million, with a free cash flow of $68 million.

As of April 25, approximately $60 million remains available under the company’s existing share repurchase authorization that expires in February 2027.

The company declared its regular quarterly cash dividend to 14 cents per share, payable on June 16, to shareholders of record as of June 2, 2025.

"We continued to deliver for our customers during the first quarter. In the U.S. we held both traffic and dollar share in a challenging consumer environment, and in our International business we grew systemwide sales by 8.9%," said President and CEO Kirk Tanner.

Outlook: Wendy's lowered FY25 adjusted EPS outlook from 98 cents-$1.02 to 92 cents-98 cents.

WEN sees FY25 global systemwide sales growth of (-2.0%) – flat. The company expects FY25 adjusted EBITDA of $530 million – $545 million.

Price Action: Wendy’s shares traded higher by 0.24% at $12.46 at last check Friday.

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