Wendy’s Company (NASDAQ:WEN) shares climbed in premarket trading after the fast-food chain reported first-quarter results that topped Wall Street expectations and reaffirmed its full-year outlook despite continued margin pressure.
Short interest in the stock also remains elevated following a sharp rise in bearish positioning earlier this year, adding to Friday’s volatility.
Wendy’s Quarter In Detail
The company reported first-quarter adjusted earnings per share of 12 cents, beating the analyst consensus estimate of 10 cents. Quarterly sales of $540.637 million (+3.3% year over year) outpaced the Street view of $517.965 million. Adjusted revenues gained 2.2% to $432.3 million.
U.S. company-operated restaurant margin fell 340 basis points year over year to 11.4%. The decrease was primarily due to a decline in traffic, commodity inflation, and labor rate inflation. An increase in average check and labor efficiencies partially offset these.
In the quarter under review, global systemwide sales were $3.2 billion, down 5.5%.
Quarterly adjusted EBITDA fell 10.6% to $111.3 million. The decrease in adjusted EBITDA was primarily driven by a decrease in U.S. Company-operated restaurant margin, lower franchise royalty revenue, and an increase in general and administrative expense. Higher net franchise fees partially offset these.
Executive Commentary
Interim CEO Ken Cook said the company is taking steps to improve performance, including launching a new Biggie platform, upgrading premium burgers and introducing new chicken sandwiches.
He said operational improvements are helping boost order accuracy and customer satisfaction, though the business remains in the early stages of a turnaround.
Cook added that Wendy’s international business remained strong, with systemwide sales rising 6% in the quarter, supported by expansion in key growth markets. The company also signed a new franchise agreement to open up to 1,000 restaurants across China over the next decade.
He said the initiatives are aimed at strengthening Wendy’s foundation, restoring momentum and supporting long-term growth.
Affirms 2026 Outlook
Wendy’s affirmed fiscal 2026 adjusted EPS guidance of 56 cents to 60 cents, versus the 57-cent analyst estimate.
The company continues to expect approximately flat global systemwide sales growth during 2026. It reaffirmed adjusted EBITDA guidance of $460 million to $480 million for the year.
Capital expenditures and franchise development fund investments are projected between $120 million and $130 million. The company also expects free cash flow of $190 million to $205 million in 2026.
Wendy’s Price Action
WEN Price Action: Wendy’s shares were up 4.46% at $7.25 during premarket trading on Friday, according to Benzinga Pro data.
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