Wendy’s first quarter results met Wall Street’s expectations for both revenue and adjusted earnings per share, as the company managed through a challenging U.S. consumer environment. Management attributed the year-over-year decline in same-store sales to softer demand, particularly in March, as customers pulled back on spending and adverse weather affected traffic earlier in the quarter. CEO Kirk Tanner described the climate as “challenging,” noting that value-seeking behavior intensified and that breakfast sales were especially impacted. The company pointed to international growth and the success of new menu collaborations, such as the Thin Mint Frosty, as bright spots during an otherwise subdued quarter.
Is now the time to buy WEN? Find out in our full research report (it’s free).
Wendy's (WEN) Q1 CY2025 Highlights:
- Revenue: $523.5 million vs analyst estimates of $524.9 million (2.1% year-on-year decline, in line)
- Adjusted EPS: $0.20 vs analyst estimates of $0.20 (in line)
- Adjusted EBITDA: $124.5 million vs analyst estimates of $122.5 million (23.8% margin, 1.7% beat)
- Management lowered its full-year Adjusted EPS guidance to $0.95 at the midpoint, a 5% decrease
- Operating Margin: 15.9%, in line with the same quarter last year
- Locations: 7,308 at quarter end, up from 7,248 in the same quarter last year
- Same-Store Sales fell 2.1% year on year (0.9% in the same quarter last year)
- Market Capitalization: $2.28 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Wendy's’s Q1 Earnings Call
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Jeffrey Bernstein (Barclays) asked how Wendy’s will retain lower-income consumers and whether value platforms need refreshing. CEO Kirk Tanner responded that Wendy’s is balancing core menu innovation with value offerings, emphasizing the launch of the 100 Days of Summer campaign.
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David Palmer (Evercore ISI) questioned where the biggest customer experience improvements are expected. Tanner highlighted investments in order accuracy, such as delivery scales and label printers, as well as increased training and operational focus across company and franchise locations.
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Dennis Geiger (UBS) requested more detail on unit development and franchisee demand. Tanner expressed confidence in the international and domestic pipeline, crediting restaurant-level economics and support programs for maintaining growth targets.
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Jon Tower (Citi) probed the drivers behind March’s unexpected sales softness and whether pressure was broad-based. CFO Ken Cook noted that both weather and falling consumer confidence contributed, with lower-income households pulling back most significantly.
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Lauren Silberman (Deutsche Bank) sought clarification on sales cadence and expectations for international versus U.S. performance. Cook replied that Q2 trends should resemble Q1, with the strongest growth anticipated internationally, while U.S. traffic remains challenged.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the effectiveness of Wendy’s 100 Days of Summer campaign and new menu collaborations in driving incremental traffic, (2) the pace and profitability of the AI-driven technology rollouts, and (3) the sustainability of international same-store sales and new unit openings. Developments in U.S. consumer sentiment and franchisee profitability will also remain important indicators.
Wendy's currently trades at $11.76, down from $12.50 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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