Dublin, Ohio – November 05, 2026 -- The Wendy's Company reported third-quarter net income of $15.1 million, down 65.9% year over year, as global systemwide sales fell 5.9% and the chain launched a multi-year turnaround called Dave's Way.
Revenues came in at $547.0 million, a decline of $2.5 million, or 0.5%. Systemwide sales reached roughly $3.3 billion. Adjusted EBITDA was $113.4 million, down $24.6 million, or 17.8%. Diluted earnings per share were $0.08, and adjusted earnings per share were $0.13, down $0.11, or 45.8%.
U.S. traffic losses drive the sales decline
U.S. systemwide sales dropped 7.6%, while international sales grew 3.5%. U.S. same-restaurant sales fell 5.7%, and international same-restaurant sales fell 2.2%. Fewer U.S. restaurants also weighed on the global total.
U.S. Company-operated restaurant margin shrank 140 basis points. Lower traffic, labor rate inflation and commodity inflation outweighed gains in average check and labor efficiencies.
Higher G&A and franchise losses cut operating profit 39.3%
Operating profit fell $36.2 million. General and administrative expense rose $15.2 million, or 26.3%, on strategic initiative spending and lower prior-year share-based compensation tied to the departure of the previous CEO. Net franchise fees declined on a higher provision for doubtful accounts, and franchise royalty revenue also fell. Reorganization and realignment costs tied to portfolio optimization added to the pressure.
Net income declined $29.2 million, also reflecting higher interest expense, partly offset by lower income taxes.
Wendy's moves to acquire up to 163 Meritage restaurants
Wendy's signed a letter of intent with Meritage Hospitality Group and its lenders to acquire up to 163 restaurants. The deal remains subject to a definitive agreement, better and higher offers, and court approval. Meritage is also exploring the sale and recapitalization of its other markets.
The move is part of a portfolio optimization effort that includes planned Company restaurant acquisitions and transfers of franchised restaurants to well-capitalized, high-performing operators, intended to strengthen franchisee economics.
Location-specific breakfast strategy targets up to $200 million in EBITDA
Wendy's revised its breakfast approach to be location specific, based on tests that yielded significant profit improvement. CFO and Chief Strategy Officer Steve Cirulis said the decision could unlock up to $200 million in restaurant-level EBITDA across the system.
CEO Bob Wright said the company has committed resources to five strategic pillars, with menu tests, marketing execution and digital acceleration already underway. Wendy's also appointed Tariq Hassan as Chief Marketing and Customer Growth Officer.
Cash of $413 million funds the plan
Wendy's held approximately $413 million in cash. Net cash from operating activities was $239.0 million for the first nine months, and free cash flow was $174.2 million, down $21.4 million, or 10.9%. Lower capital expenditures and franchise development fund investments partly offset weaker operating cash flow.
The board declared a quarterly dividend of $0.07 per share, payable December 15, 2026, to shareholders of record on December 1. Wendy's repurchased no shares in the third quarter or so far in the fourth quarter. About $35.0 million remains under a buyback authorization that expires in February 2027.