Wendy’s Co (NASDAQ:WEN) reported second-quarter 2026 results Friday, beating revenue and adjusted EPS estimates despite continued weakness in its U.S. business.

Revenue rose 1.7% year over year to $570.6 million, above the $557.185 million estimate. Adjusted EPS of 18 cents topped the 17 cents estimate but fell from 29 cents a year earlier.

Net income fell 40.8% to $32.6 million, while adjusted EBITDA dropped 15.4% to $124.1 million.

• Wendy’s stock is trading at depressed levels. Where are WEN shares going?

U.S. Weakness Pressures Sales

Global systemwide sales fell 6.5% to $3.42 billion, including an 8.2% decline in the U.S. and 3.4% growth internationally.

U.S. same-restaurant sales fell 7%, while international same-restaurant sales declined 2.3%.

Wendy’s opened 21 U.S. and 27 international restaurants, ending the quarter with 7,180 locations globally.

Company-operated restaurants outperformed the broader system in same-restaurant sales, while U.S. customer satisfaction scores improved.

Margins and Profit Decline

U.S. company-operated restaurant margin fell 240 basis points to 13.8%.

The decline reflected commodity inflation, lower traffic and higher labor rates, partly offset by higher average check and labor efficiencies.

G&A expense rose to $66.2 million from $59.5 million, while operating profit fell 24% to $79.3 million.

Revenue benefited from higher advertising funds revenue, non-recurring vendor incentives and restaurant acquisitions, partly offset by lower franchise royalty and rental income.

Cash Flow Remains Higher

First-half operating cash flow rose 9.6% to $160 million, while free cash flow increased 9.9% to $120.3 million.

Cash and cash equivalents stood at $341.2 million. Long-term debt totaled $2.72 billion, plus $29.8 million classified as current debt.

Turnaround Takes Priority

CEO Bob Wright said quality has eroded and Wendy’s is not delivering the experience customers expect.

The turnaround will focus on menu quality and value, marketing, operational execution, digital engagement and restaurant-led growth.

Wendy’s withdrew its 2026 outlook and cut its quarterly dividend to 7 cents from 14 cents per share.

Management expects second-half sales trends to remain similar to the second quarter, with continued traffic pressure and margin headwinds from sales deleverage and 5% to 6% commodity inflation.

WEN Price Action: Wendy’s shares were up 0.61% at $7.44 at the time of publication on Friday, according to Benzinga Pro data.

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