Wendy's Q2 Earnings Call: Analyst Questions Highlight Operational Changes Amidst Slower Sales

Wendy's Q2 earnings call revealed a 1.7% YoY revenue decline, beating analyst estimates. Adjusted EPS increased 14% to $0.29, while adjusted EBITDA rose 26.1% to $146.6 million. The company lowered its full-year adjusted EPS guidance to $0.86, a 10% decrease. Analyst questions highlighted the shift from broad collaborations to core menu innovation, franchisee sentiment, and the timeline for improved customer satisfaction to translate into sales gains.

Wendy's (WEN) reported its second-quarter (Q2) 2025 earnings, revealing a 1.7% year-over-year (YoY) decline in revenue to $560.93 million, which exceeded analyst estimates by 0.97% [1]. Despite the revenue decline, the company's adjusted earnings per share (EPS) increased by 14% to $0.29, surpassing the consensus estimate of $0.25. Adjusted EBITDA rose significantly by 26.1% to $146.6 million [2].

The company's domestic business faced headwinds, with U.S. same-restaurant sales declining by 3.6% [2]. However, the international segment showed resilience, with international systemwide sales growing by 8.1% [1]. Wendy's opened 17 net new international locations and 9 net new U.S. restaurants during the quarter [2].

Management attributed the U.S. sales decline to factors including traffic decreases, cost inflation, and softening consumer demand among lower-income households [2]. Despite these challenges, the company maintained its focus on digital transformation, expanding breakfast options, and launching new menu items like "Thin Mint Frosty" desserts and collaborations with popular brands [2].

Wendy's lowered its full-year adjusted EPS guidance to a range of $0.86 to $0.98, a 10% decrease from the previous estimate [2]. The company expects global systemwide sales to decline between 5.0% and 3.0%, with adjusted EBITDA projected to fall to a range of $505 to $525 million [2]. The outlook reflects management's belief in persistent consumer pressures, especially in the U.S., throughout the remainder of the year.

Analyst questions during the earnings call highlighted the shift from broad collaborations to core menu innovation, franchisee sentiment, and the timeline for improved customer satisfaction to translate into sales gains. Wendy's management emphasized its commitment to operational improvements and franchisee profitability while continuing to expand internationally and innovate its menu offerings [2].

References:
[1] https://finance.yahoo.com/news/wendys-wen-q2-earnings-taking-010001165.html
[2] https://www.nasdaq.com/articles/wendys-wen-fiscal-q2-eps-beats-16