The Wendy's Company posted steep quarterly declines Aug. 7, with U.S. same-restaurant sales falling 7% and customer traffic plunging 12.5% at the fast-food chain headquartered at 1 Dave Thomas Blvd. in Dublin.
Net income dropped 41% to $32.6 million, down from $55.1 million a year earlier, according to the company's second-quarter earnings release. Global systemwide sales fell 6.5%, driven by an 8.2% decline in the U.S. that was only partially offset by 3.4% international growth.
The company also slashed its quarterly dividend from $0.10 to $0.07 per share and withdrew its full-year 2026 financial outlook entirely. Wendy's had previously guided for roughly flat global systemwide sales and adjusted earnings per share of $0.56 to $0.60.
Shares were trading near $7.10 Friday morning, close to the lower end of the stock's 52-week range of $6.07 to $10.84.
New CEO unveils turnaround plan
CEO Bob Wright, who took the helm May 21 after nearly a year without a permanent chief executive, used the earnings call to outline a five-point turnaround strategy covering menu quality, marketing, operations, digital experience and restaurant growth.
Wright said the company is "clearly not performing at our potential" and identified quality degradation, weak value offerings, inconsistent operations and ineffective marketing as the chain's four core problems. He said the company will rebuild its menu at the ingredient, item and category levels while reviewing its pricing architecture.
The tone marked a shift. When Wendy's named Wright CEO in May, he said he believed the best days for the brand were ahead.
Wright previously led Potbelly Corporation through a turnaround that generated over 500% share price growth before its sale to RaceTrac in December 2025. He brought CFO Steve Cirulis with him from Potbelly; Cirulis was named Wendy's chief financial officer and chief strategy officer on June 23.
Shrinking footprint
Wendy's closed a net 81 U.S. restaurants during the quarter, with 102 closures against just 21 openings. Year-to-date, the chain has recorded 289 U.S. closures and a net loss of 245 locations, reducing its domestic count to 5,724. Globally, the company ended the quarter with 7,180 restaurants, down from 7,334 a year ago.
U.S. company-operated restaurant margins fell 2.4 percentage points to 13.8%, squeezed by commodity inflation, declining traffic and rising labor costs. Management said full-year commodity inflation is expected to run 5% to 6%.
What's next
Wright told analysts a comprehensive strategic plan will be shared at the Q3 2026 earnings call, expected around November.
The company does not expect a return to year-over-year systemwide sales growth in the third or fourth quarter. The reduced dividend of $0.07 per share is payable Sept. 15 to shareholders of record as of Sept. 1. Cirulis framed the capital reallocation on the call: "Every dollar of capital will be evaluated against one question: Will this materially improve traffic, restaurant economics, or long-term shareholder value?"
