0000030697-25-000039
SEC filingGlobal same-restaurant sales declined 3.7%, revenues fell 3.0% to $549.5M, driven by traffic decreases and higher commodity costs.
In the third quarter of 2025, Wendy's total revenues decreased 3.0% to $549.5 million from $566.7 million in the prior year period. The decline was driven by a 3.7% decrease in global same-restaurant sales, as U.S. systemwide same-restaurant sales fell 4.7% while international same-restaurant sales grew 3.0%. Company-operated sales increased modestly by $2.8 million due to the acquisition of 35 franchise restaurants, but same-store sales at company-operated stores declined 0.7%. Franchise royalty revenue decreased by $4.8 million, reflecting lower franchise same-restaurant sales. Advertising funds revenue dropped $16.1 million, primarily due to prior year promotional activity and lower U.S. franchise sales. Cost of sales as a percentage of sales increased to 87.6% from 84.9%, driven by higher commodity costs, restaurant labor rates, and occupancy costs. Consequently, global Company-operated restaurant margin contracted 270 basis points to 12.4%. Operating profit declined 2.7% to $92.0 million, while net income fell 11.8% to $44.3 million, partly due to higher impairment charges and lower other income. The effective tax rate rose to 30.0% from 27.9%.
Wendy's U.S. segment revenue fell 3.7% to $451.4 million, with segment profit down $6.5 million to $123.3 million. The decline was attributed to lower advertising funds revenue, decreased same-restaurant sales, and higher cost of sales, partially offset by reduced incremental advertising funding. Wendy's International segment revenue increased 6.1% to $39.9 million, driven by net new restaurant openings and a 2.4% increase in franchise same-restaurant sales. Segment profit rose marginally to $11.1 million. Global Real Estate & Development revenue decreased 3.6% to $58.2 million due to lease assignments and lower development fees, but segment profit increased to $27.6 million as rental expense declined.
Management introduced Project Fresh, a strategic plan centered on brand revitalization, operational excellence, system optimization, and capital allocation to drive profitable growth. The company expects continued labor and commodity inflation in 2025 and aims to manage these pressures through selective menu price increases and product mix. No specific numerical guidance was provided. Wendy's also continued share repurchases, buying back $200 million in stock during the first nine months, and paid dividends. The company remains focused on digital sales growth, which reached 21% of global systemwide sales in Q3.
As of September 28, 2025, Wendy's held $291.4M in cash and cash equivalents, down from $450.5M at year-end 2024, primarily due to shareholder returns. Total debt (current portion of $425.3M plus long-term debt of $2,298.6M) stood at $2.72B, a decrease of $16.3M from $2.74B at December 29, 2024. The company's net debt position (total debt minus cash) was $2.43B. Stockholders' equity declined to $109.2M from $259.4M due to share repurchases and dividends. Accounts and notes receivable increased to $128.5M from $99.9M, while advertising funds restricted assets rose to $124.6M.
The Notes disclose lease guarantees of $95.1M as of September 28, 2025, primarily for former company-operated locations now operated by franchisees, extending through 2045. Outstanding letters of credit totaled $29.0M. No explicit purchase commitments for inventory or capacity were reported. Deferred franchise fees (contract liabilities) were $99.5M, expected to be recognized over future periods.
During the nine months ended September 28, 2025, Wendy's returned $303M to shareholders: $200M in share repurchases (14.4M shares) and $103M in dividends. The company reduced its quarterly dividend from $0.25 to $0.14 starting in Q2 2025, a 44% decrease. As of September 28, 2025, $35M remained under the January 2023 repurchase authorization. Net long-term debt activity included $23.5M in proceeds and $30.4M in repayments, resulting in a net reduction of $6.9M. Capital expenditures totaled $64.0M (3.9% of sales), with an additional $23.1M in franchise development fund investments.
Wendy's reports three segments: Wendy's U.S., Wendy's International, and Global Real Estate & Development. For Q3 2025, Wendy's U.S. generated $451.4M in revenue (82% of total), with adjusted EBITDA of $123.3M (down 5% YoY). Wendy's International revenue was $39.9M (7% of total), with adjusted EBITDA of $11.1M (up 0.2% YoY). Global Real Estate & Development revenue was $58.2M (11% of total), with adjusted EBITDA of $27.6M (up 1.3% YoY). Total segment adjusted EBITDA was $161.9M, down from $168.1M in Q3 2024. The company operated 435 company-owned restaurants and franchisees operated 6,928 as of September 28, 2025.