Wendy's Company (WEN) is faced with continued growth challenges as new management lays out a turnaround strategy, RBC Capital Markets said in a note Friday.

The report said its Q2 print was challenging from a numbers perspective but the new management formulated its turnaround strategy which could shift the narrative more favorably.

The note said US same-store sales missed in Q2 and soft traffic trends continued into Q3 as growth initiatives didn't drive noticeable acceleration, while Canada was also pressured.

"We're intrigued by a potential improvement but need to see evidence before we consider getting more constructive," it said. RBC kept its sector perform rating with $7.00 price target.

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