What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-02 compared with 2024-10-31 · 298 added, 366 removed, 381 unchanged (64% of the section changed)

3 unchanged sentences

(In Thousands Except Par Value)

September 29,

2025 December 29,

52 unchanged sentences

(In Thousands Except Per Share Amounts)

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Three Months Ended

2025 March 31,

Sales $ 219,510 $ 225,323

11 unchanged sentences

Amortization of cloud computing arrangements 4,167 3,542

System optimization gains, net ( 420 ) ( 120 ) ( 573 ) ( 119 )

System optimization losses, net 90 127

Reorganization and realignment costs ( 692 ) 5,673

4 unchanged sentences

Interest expense, net ( 31,477 ) ( 30,535 )

Loss on early extinguishment of debt — ( 319 ) — ( 1,585 )

Investment income (loss), net — — 11 ( 10,389 )

Investment loss, net ( 1,718 ) —

Other income, net 4,986 6,836

9 unchanged sentences

(In Thousands)

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Three Months Ended

2025 March 31,

Net income $ 39,232 $ 41,993

11 unchanged sentences

Net income — — 39,232 — — 39,232

Other comprehensive loss — — — — ( 4,586 ) ( 4,586 )

Cash dividends — — ( 51,374 ) — — ( 51,374 )

Repurchases of common stock — — — ( 7,216 ) — ( 7,216 )

Share-based compensation — 5,853 — — — 5,853

Common stock issued upon exercises of stock options

— 179 — 1,036 — 1,215

Common stock issued upon vesting of restricted shares

— ( 3,855 ) — 1,778 — ( 2,077 )

Other — 29 ( 17 ) 55 — 67

Balance at March 31, 2024 $ 47,042 $ 2,962,241 $ 400,465 $ ( 3,053,133 ) $ ( 62,961 ) $ 293,654

Net income — — 54,643 — — 54,643

Other comprehensive loss — — — — ( 2,011 ) ( 2,011 )

Cash dividends — — ( 51,252 ) — — ( 51,252 )

Repurchases of common stock — — — ( 27,493 ) — ( 27,493 )

Share-based compensation — 5,824 — — — 5,824

Common stock issued upon exercises of stock options

— ( 134 ) — 874 — 740

Common stock issued upon vesting of restricted shares

— ( 3,484 ) — 3,058 — ( 426 )

Other — 32 ( 20 ) 62 — 74

Balance at June 30, 2024 $ 47,042 $ 2,964,479 $ 403,836 $ ( 3,076,632 ) $ ( 64,972 ) $ 273,753

Net income — — 50,224 — — 50,224

Other comprehensive income — — — — 1,912 1,912

7 unchanged sentences

Other — 23 ( 19 ) 51 — 55

Balance at September 29, 2024 $ 47,042 $ 2,967,927 $ 403,259 $ ( 3,097,785 ) $ ( 60,590 ) $ 259,853

See accompanying notes to condensed consolidated financial statements.

THE WENDY’S COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY—CONTINUED

(In Thousands)

Stock Additional

Capital Retained Earnings Common Stock Held in Treasury Accumulated Other Comprehensive Loss Total

Balance at January 1, 2023 $ 47,042 $ 2,937,885 $ 414,749 $ ( 2,869,780 ) $ ( 64,176 ) $ 465,720

Net income — — 39,821 — — 39,821

Other comprehensive income — — — — 158 158

Cash dividends — — ( 53,103 ) — — ( 53,103 )

Repurchases of common stock — — — ( 38,810 ) — ( 38,810 )

Share-based compensation — 4,609 — — — 4,609

Common stock issued upon exercises of stock options

— 808 — 1,808 — 2,616

Common stock issued upon vesting of restricted shares

— ( 2,222 ) — 678 — ( 1,544 )

Other — 58 ( 22 ) 54 — 90

Balance at April 2, 2023 $ 47,042 $ 2,941,138 $ 401,445 $ ( 2,906,050 ) $ ( 64,018 ) $ 419,557

Net income — — 59,632 — — 59,632

Other comprehensive income — — — — 4,949 4,949

Cash dividends — — ( 52,612 ) — — ( 52,612 )

Repurchases of common stock — — — ( 50,183 ) — ( 50,183 )

Share-based compensation — 5,609 — — — 5,609

Common stock issued upon exercises of stock options

— 1,136 — 3,829 — 4,965

Common stock issued upon vesting of restricted shares

— ( 2,182 ) — 1,283 — ( 899 )

Other — 53 ( 16 ) 60 — 97

Balance at July 2, 2023 $ 47,042 $ 2,945,754 $ 408,449 $ ( 2,951,061 ) $ ( 59,069 ) $ 391,115

Balance at March 30, 2025 $ 47,042 $ 2,984,865 $ 389,481 $ ( 3,218,308 ) $ ( 72,841 ) $ 130,239

Balance at December 31, 2023 $ 47,042 $ 2,960,035 $ 409,863 $ ( 3,048,786 ) $ ( 58,375 ) $ 309,779

Net income — — 41,993 — — 41,993

8 unchanged sentences

Other — 29 ( 17 ) 55 — 67

Balance at October 1, 2023 $ 47,042 $ 2,950,916 $ 414,324 $ ( 3,006,116 ) $ ( 63,602 ) $ 342,564

Balance at March 31, 2024 $ 47,042 $ 2,962,241 $ 400,465 $ ( 3,053,133 ) $ ( 62,961 ) $ 293,654

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In Thousands)

Nine Months Ended

September 29,

2024 October 1,

Three Months Ended

2025 March 31,

Cash flows from operating activities:

11 unchanged sentences

Net receipt of deferred vendor incentives 11,178 8,584

System optimization (gains), net ( 573 ) ( 119 )

System optimization losses, net 90 127

Distributions received from joint ventures, net of equity in earnings 717 430

10 unchanged sentences

Cash flows from financing activities:

Proceeds from long-term debt 15,000 —

Repayments of long-term debt ( 15,813 ) ( 7,313 )

5 unchanged sentences

Net cash used in financing activities ( 179,320 ) ( 72,630 )

Net cash used in operations before effect of exchange rate changes on cash ( 32,684 ) ( 159,231 )

Net cash (used in) provided by operations before effect of exchange rate changes on cash ( 115,393 ) 6,544

Effect of exchange rate changes on cash 744 ( 2,274 )

Net decrease in cash, cash equivalents and restricted cash ( 34,287 ) ( 158,924 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 114,649 ) 4,270

Cash, cash equivalents and restricted cash at beginning of period 503,608 588,816

6 unchanged sentences

The accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) of The Wendy’s Company (“The Wendy’s Company” and, together with its subsidiaries, the “Company,” “we,” “us” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and, therefore, do not include all information and footnotes required by GAAP for complete financial statements.

In our opinion, the Financial Statements contain all adjustments of a normal recurring nature necessary to present fairly our financial position as of September 29, 2024, the results of our operations for the three and nine months ended September 29, 2024 and October 1, 2023 and cash flows for the nine months ended September 29, 2024 and October 1, 2023.

The results of operations for the nine months ended September 29, 2024 are not necessarily indicative of the results to be expected for the full 2024 fiscal year.

In our opinion, the Financial Statements contain all adjustments of a normal recurring nature necessary to present fairly our financial position as of March 30, 2025, the results of our operations for the three months ended March 30, 2025 and March 31, 2024 and cash flows for the three months ended March 30, 2025 and March 31, 2024.

The results of operations for the three months ended March 30, 2025 are not necessarily indicative of the results to be expected for the full 2025 fiscal year.

The Financial Statements should be read in conjunction with the audited consolidated financial statements for The Wendy’s Company and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 (the “Form 10-K”).

4 unchanged sentences

We report on a fiscal year consisting of 52 or 53 weeks ending on the Sunday closest to or on December 31.

All three- and nine-month periods presented herein contain 13 weeks and 39 weeks, respectively.

All three-month periods presented herein contain 13 weeks.

All references to years, quarters and months relate to fiscal periods rather than calendar periods.

3 unchanged sentences

Wendy’s International Global Real Estate & Development Total

Three Months Ended September 29, 2024

Three Months Ended March 30, 2025

Sales at Company-operated restaurants $ 212,744 $ 6,766 $ — $ 219,510

4 unchanged sentences

Total revenues $ 429,614 $ 34,721 $ 59,137 $ 523,472

Three Months Ended October 1, 2023

Three Months Ended March 31, 2024

Sales at Company-operated restaurants $ 219,468 $ 5,855 $ — $ 225,323

7 unchanged sentences

(In Thousands Except Per Share Amounts)

Wendy’s International Global Real Estate & Development Total

Nine Months Ended September 29, 2024

Sales at Company-operated restaurants $ 673,364 $ 19,717 $ — $ 693,081

Franchise royalty revenue 341,229 53,370 — 394,599

Franchise fees 53,511 6,584 3,344 63,439

Franchise rental income — — 177,938 177,938

Advertising funds revenue 316,059 27,103 — 343,162

Total revenues $ 1,384,163 $ 106,774 $ 181,282 $ 1,672,219

Nine Months Ended October 1, 2023

Sales at Company-operated restaurants $ 685,168 $ 18,190 $ — $ 703,358

Franchise royalty revenue 333,958 50,408 — 384,366

Franchise fees 51,812 4,515 3,377 59,704

Franchise rental income — — 173,407 173,407

Advertising funds revenue 296,043 24,049 — 320,092

Total revenues $ 1,366,981 $ 97,162 $ 176,784 $ 1,640,927

Contract Balances

The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers:

September 29,

2024 (a) December 31, 2023 (a)

March 30, 2025 (a) December 29, 2024 (a)

Receivables, which are included in “Accounts and notes receivable, net” (b)

6 unchanged sentences

(b) Includes receivables related to “Sales” and “Franchise royalty revenue and fees.”

(c) Deferred franchise fees are included in “Accrued expenses and other current liabilities” and “Deferred franchise fees” and totaled $ 11,454 and $ 89,300 , respectively, as of September 29, 2024, and $ 10,673 and $ 90,132 , respectively, as of December 31, 2023.

(c) Deferred franchise fees are included in “Accrued expenses and other current liabilities” and “Deferred franchise fees” and totaled $ 10,944 and $ 88,057 , respectively, as of March 30, 2025, and $ 11,024 and $ 88,387 , respectively, as of December 29, 2024.

Significant changes in deferred franchise fees are as follows:

Nine Months Ended

September 29,

2024 October 1,

Three Months Ended

2025 March 31,

Deferred franchise fees at beginning of period $ 99,411 $ 100,805

3 unchanged sentences

Deferred franchise fees at end of period $ 99,001 $ 100,264

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Anticipated Future Recognition of Deferred Franchise Fees

5 unchanged sentences

(a) Represents franchise fees expected to be recognized for the remainder of 2025, which includes development-related franchise fees expected to be recognized over a duration of one year or less.

(3) System Optimization Gains, Net

The Company’s system optimization initiative included a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating franchisee-to-franchisee restaurant transfers (“Franchise Flips”).

As of September 29, 2024, Company-operated restaurant ownership was approximately 5 % of the total system.

While the Company has no plans to move its ownership away from approximately 5 % of the total system, the Company expects to continue to optimize the Wendy’s system through Franchise Flips, as well as evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees, to further strengthen the franchisee base, drive new restaurant development and accelerate reimages.

During the nine months ended September 29, 2024 and October 1, 2023, the Company facilitated 14 and 88 Franchise Flips, respectively.

Additionally, during the nine months ended September 29, 2024, the Company completed the sale of one Company-operated restaurant to a franchisee.

No Company-operated restaurants were sold to or purchased from franchisees during the nine months ended October 1, 2023.

Gains and losses recognized on dispositions are recorded to “System optimization gains, net” in our condensed consolidated statements of operations.

Costs related to acquisitions and dispositions under our system optimization initiative are recorded to “Reorganization and realignment costs,” which are further described in Note 4.

All other costs incurred related to facilitating Franchise Flips are recorded to “Franchise support and other costs.”

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

The following is a summary of the disposition activity recorded as a result of our system optimization initiative:

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Number of restaurants sold to franchisees 1 — 1 —

Proceeds from sales of restaurants $ 834 $ — $ 834 $ —

Net assets sold (a) ( 725 ) — ( 725 ) —

Other 6 — 6 —

Post-closing adjustments on sales of restaurants (b) 440 537 694 537

Gain on sales of restaurants, net 555 537 809 537

Loss on sales of other assets, net (c) ( 135 ) ( 417 ) ( 236 ) ( 418 )

System optimization gains, net $ 420 $ 120 $ 573 $ 119

_______________

(a) Net assets sold consisted primarily of land.

(b) Represents the recognition of deferred gains as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees.

(c) During the three and nine months ended September 29, 2024, the Company received net cash proceeds of $ 1,787 and $ 2,388 , respectively, primarily from the sale of surplus and other properties.

During the nine months ended October 1, 2023, the Company received net cash proceeds of $ 280 primarily from the sale of surplus and other properties .

Assets Held for Sale

As of September 29, 2024 and December 31, 2023, the Company had assets held for sale of $ 2,517 and $ 2,689 , respectively, primarily consisting of surplus properties.

Assets held for sale are included in “Prepaid expenses and other current assets.”

(4) Reorganization and Realignment Costs

The following is a summary of the initiatives included in “Reorganization and realignment costs:”

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Organizational redesign $ 296 $ 579 $ 8,327 $ 7,986

Other reorganization and realignment plans 58 32 152 114

Reorganization and realignment costs $ 354 $ 611 $ 8,479 $ 8,100

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Organizational Redesign

In February 2023, the Board of Directors approved a plan to redesign the Company’s organizational structure to better support the execution of the Company’s long-term growth strategy by maximizing organizational efficiency and streamlining decision making (the “Organizational Redesign Plan”).

As a result of the Organizational Redesign Plan, the Company held its general and administrative expense in 2023 relatively flat compared with 2022.

Additionally, in January 2024, the Board of Directors announced the appointment of Kirk Tanner as the Company’s new President and Chief Executive Officer, effective February 5, 2024.

Tanner succeeded Todd A.

Penegor, the Company’s previous President and Chief Executive Officer, who departed from the Company in February 2024.

The Company expects to incur total costs of approximately $ 18,000 related to the Organizational Redesign Plan, including costs related to the succession of the President and Chief Executive Officer role.

During the nine months ended September 29, 2024 and October 1, 2023, the Company recognized costs totaling $ 8,327 and $ 7,986 , respectively, which primarily included severance and related employee costs.

The Company expects to incur additional costs aggregating approximately $ 800 , comprised primarily of share-based compensation.

The Company expects costs related to the Organizational Redesign Plan to continue into 2026.

The following is a summary of the costs recorded as a result of the Organizational Redesign Plan:

Three Months Ended Nine Months Ended Total Incurred Since Inception

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Severance and related employee costs $ 12 $ 114 $ 7,322 $ 5,674 $ 13,565

Recruitment and relocation costs 75 140 157 304 711

Third-party and other costs 57 173 120 904 1,117

144 427 7,599 6,882 15,393

Share-based compensation (a) 152 152 728 1,104 1,998

Total organizational redesign $ 296 $ 579 $ 8,327 $ 7,986 $ 17,391

_______________

(a) Primarily represents the accelerated recognition of share-based compensation resulting from the termination of employees under the Organizational Redesign Plan.

As of September 29, 2024, the accruals for the Organizational Redesign Plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $ 4,210 and $ 1,215 , respectively.

The tables below present a rollforward of our accruals for the Organizational Redesign Plan.

Charges Payments Balance

September 29,

Severance and related employee costs $ 1,692 $ 7,322 $ ( 3,589 ) $ 5,425

Recruitment and relocation costs — 157 ( 157 ) —

Third-party and other costs — 120 ( 120 ) —

Nature of Leases

The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties.

In addition, the Company owns sites and leases sites from third parties, which it leases and/or subleases to franchisees.

The Company also leases restaurant, office and transportation equipment.

As of March 30, 2025, the nature of restaurants operated by the Company and its franchisees was as follows:

Company-operated restaurants:

Owned land and building 155

Owned building and held long-term land leases 138

Leased land and building 107

Total Company-operated restaurants 400

Franchisee-operated restaurants:

Company-owned properties leased to franchisees 489

Company-leased properties subleased to franchisees 1,156

Other franchisee-operated restaurants 5,263

Total franchisee-operated restaurants 6,908

Total Company-operated and franchisee-operated restaurants 7,308

Company as Lessee

The components of lease cost are as follows:

Three Months Ended

2025 March 31,

Finance lease cost:

Amortization of finance lease assets $ 5,145 $ 4,297

Interest on finance lease liabilities 10,877 10,658

16,022 14,955

2023 Charges Payments Balance

Severance and related employee costs $ — $ 5,674 $ ( 3,524 ) $ 2,150

Recruitment and relocation costs — 304 ( 304 ) —

Third-party and other costs — 904 ( 904 ) —

Operating lease cost 20,517 21,701

Variable lease cost (a) 16,213 16,488

Short-term lease cost 1,266 1,394

Total operating lease cost (b) 37,996 39,583

Total lease cost $ 54,018 $ 54,538

_______________

(a) Includes expenses for executory costs of $ 10,394 and $ 10,221 for the three months ended March 30, 2025 and March 31, 2024, respectively, for which the Company is reimbursed by sublessees.

(b) Includes $ 30,652 and $ 31,718 for the three months ended March 30, 2025 and March 31, 2024, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees.

Also includes $ 6,941 and $ 7,388 for the three months ended March 30, 2025 and March 31, 2024, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

Other Reorganization and Realignment Plans

Costs incurred under the Company’s other reorganization and realignment plans were not material during the nine months ended September 29, 2024 and October 1, 2023.

The Company does not expect to incur any material additional costs under these plans.

Company as Lessor

The components of lease income are as follows:

Three Months Ended

2025 March 31,

Sales-type and direct-financing leases:

Selling loss $ ( 11 ) $ ( 16 )

Interest income (a) 6,915 7,719

Operating lease income 42,421 41,497

Variable lease income 16,033 16,489

Franchise rental income (b) $ 58,454 $ 57,986

_______________

(a) Included in “Interest expense, net.”

(b) Includes sublease income of $ 42,784 and $ 42,783 recognized during the three months ended March 30, 2025 and March 31, 2024, respectively.

Sublease income includes lessees’ variable payments to the Company for executory costs of $ 10,197 and $ 10,089 for the three months ended March 30, 2025 and March 31, 2024, respectively.

(4) Investments

The following is a summary of the carrying value of our investments:

September 29,

2025 December 29,

6 unchanged sentences

Such investment is accounted for using the equity method, under which our results of operations include our share of the income of the investee in “Other operating income, net.”

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Presented below is activity related to our investment in TimWen included in our condensed consolidated financial statements:

Nine Months Ended

September 29,

2024 October 1,

Three Months Ended

2025 March 31,

Balance at beginning of period $ 27,288 $ 32,727

7 unchanged sentences

Other Investments in Equity Securities

During the nine months ended October 1, 2023, the Company recorded impairment charges of $ 10,389 for the difference between the estimated fair value and the carrying value of an investment in equity securities.

During the three months ended March 30, 2025, the Company recorded an impairment charge of $ 1,718 for the difference between the estimated fair value and the carrying value of an investment in equity securities.

As a result, the carrying value of the investment was reduced to zero as of March 30, 2025.

(5) Long-Term Debt

Long-term debt consisted of the following:

2025 December 29,

Class A-2 Notes:

4.236 % Series 2022-1 Class A-2-I Notes, anticipated repayment date 2029

$ 97,250 $ 97,500

4.535 % Series 2022-1 Class A-2-II Notes, anticipated repayment date 2032

385,134 386,134

2.370 % Series 2021-1 Class A-2-I Notes, anticipated repayment date 2029

417,644 418,769

2.775 % Series 2021-1 Class A-2-II Notes, anticipated repayment date 2031

625,405 627,030

3.783 % Series 2019-1 Class A-2-I Notes, anticipated repayment date 2026

352,673 353,673

4.080 % Series 2019-1 Class A-2-II Notes, anticipated repayment date 2029

397,498 398,623

3.884 % Series 2018-1 Class A-2-II Notes, anticipated repayment date 2028

435,162 436,349

7 % debentures, due in December 2025

49,084 48,913

Unamortized debt issuance costs ( 24,997 ) ( 26,698 )

2,734,853 2,740,293

Less amounts payable within one year ( 78,334 ) ( 78,163 )

Total long-term debt $ 2,656,519 $ 2,662,130

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

Other Long-Term Debt

advertising fund has a revolving line of credit of $ 15,000 , which was established to support the Company’s advertising fund operations and bears interest at the Secured Overnight Financing Rate (“SOFR”) plus 2.25 %.

Borrowings under the line of credit are guaranteed by Wendy’s.

During the three months ended March 30, 2025, the Company drew down $ 15,000 under the revolving line of credit, of which the Company repaid $ 8,500 in March 2025.

As a result, as of March 30, 2025, the Company had outstanding borrowings of $ 6,500 under the revolving line of credit, which is included in “Advertising funds restricted liabilities.”

(6) Fair Value Measurements

11 unchanged sentences

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:

September 29,

2025 December 29,

4 unchanged sentences

Other investments in equity securities (a) — — 1,718 1,718 Level 2

Financial liabilities (b)

Series 2022-1 Class A-2-I Notes 97,750 95,635 98,500 92,289 Level 2

Series 2022-1 Class A-2-II Notes 387,134 367,777 390,134 370,577 Level 2

Series 2021-1 Class A-2-I Notes 419,894 379,609 423,269 362,572 Level 2

Series 2021-1 Class A-2-II Notes 628,655 553,411 633,530 530,581 Level 2

Series 2019-1 Class A-2-I Notes 354,673 348,204 357,673 341,606 Level 2

Series 2019-1 Class A-2-II Notes 399,748 388,131 403,123 374,058 Level 2

Series 2018-1 Class A-2-II Notes 437,537 425,767 441,099 412,754 Level 2

7 % debentures, due in 2025

Financial liabilities

Series 2022-1 Class A-2-I Notes (b) 97,250 91,379 97,500 93,744 Level 2

Series 2022-1 Class A-2-II Notes (b) 385,134 362,438 386,134 371,855 Level 2

Series 2021-1 Class A-2-I Notes (b) 417,644 377,738 418,769 376,256 Level 2

Series 2021-1 Class A-2-II Notes (b) 625,405 538,661 627,030 551,981 Level 2

Series 2019-1 Class A-2-I Notes (b) 352,673 346,060 353,673 345,093 Level 2

Series 2019-1 Class A-2-II Notes (b) 397,498 379,491 398,623 387,039 Level 2

Series 2018-1 Class A-2-II Notes (b) 435,162 419,931 436,349 418,027 Level 2

advertising fund revolving line of credit

6,500 6,500 — — Level 2

7 % debentures, due in 2025 (b)

49,084 49,488 48,913 50,034 Level 2

_______________

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(a) The fair value of our other investments in equity securities is based on our review of information provided by the investment manager, which is based on observable price changes in orderly transactions for a similar investment of the same issuer.

3 unchanged sentences

Our cash equivalents are the only financial assets measured and recorded at fair value on a recurring basis.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Non-Recurring Fair Value Measurements

6 unchanged sentences

Fair Value Measurements

September 29,

2025 Level 1 Level 2 Level 3

7 unchanged sentences

Total $ 3,949 $ — $ — $ 3,949

(7) Impairment of Long-Lived Assets

The Company records impairment charges as a result of (1) the deterioration in operating performance of certain Company-operated restaurants, (2) the Company’s decision to lease and/or sublease properties to franchisees in connection with the sale or anticipated sale of Company-operated restaurants, including any subsequent lease modifications and (3) classifying surplus properties as held for sale.

The following is a summary of impairment losses recorded, which represent the excess of the carrying amount over the fair value of the affected assets and are included in “Impairment of long-lived assets:”

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Company-operated restaurants $ — $ — $ 2,418 $ 428

Surplus properties 178 59 455 85

$ 178 $ 59 $ 2,873 $ 513

(7) Income Taxes

The Company’s effective tax rate for the three months ended March 30, 2025 and March 31, 2024 was 28.6 % and 26.9 %, respectively.

The Company’s effective tax rate varied from the U.S.

federal statutory rate of 21 % for the three months ended March 30, 2025 primarily due to state income taxes and the tax effects of our foreign operations.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

(8) Income Taxes

The Company’s effective tax rate for the three months ended September 29, 2024 and October 1, 2023 was 27.9 % and 25.5 %, respectively.

The Company’s effective tax rate varied from the U.S.

federal statutory rate of 21 % for the three months ended September 29, 2024 primarily due to state income taxes and the tax effects of our foreign operations.

The Company’s effective tax rate for the nine months ended September 29, 2024 and October 1, 2023 was 27.3 % and 25.8 %, respectively.

The Company’s effective tax rate varied from the U.S.

federal statutory rate of 21 % for the nine months ended September 29, 2024 primarily due to state income taxes and the tax effects of our foreign operations.

There were no significant changes to the unrecognized tax benefits or related interest and penalties for the three and nine months ended September 29, 2024.

During the next twelve months, we believe it is reasonably possible the Company will reduce unrecognized tax benefits by up to $ 220 due to lapses of statutes of limitations.

The current portion of refundable income taxes was $ 9,307 and $ 5,284 as of September 29, 2024 and December 31, 2023, respectively, and is included in “Accounts and notes receivable, net.” There were no long-term refundable income taxes as of September 29, 2024 or December 31, 2023.

(8) Net Income Per Share

The calculation of basic and diluted net income per share was as follows:

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Three Months Ended

2025 March 31,

Net income $ 39,232 $ 41,993

2 unchanged sentences

Dilutive effect of stock options and restricted shares

990 1,768 1,285 2,185

Weighted average diluted shares outstanding 201,617 206,971

2 unchanged sentences

Diluted $ .19 $ .20

Basic net income per share for the three and nine months ended September 29, 2024 and October 1, 2023 was computed by dividing net income amounts by the weighted average number of shares of common stock outstanding.

Basic net income per share for the three months ended March 30, 2025 and March 31, 2024 was computed by dividing net income amounts by the weighted average number of shares of common stock outstanding.

Diluted net income per share was computed by dividing net income by the weighted average number of basic shares outstanding plus the potential common share effect of dilutive stock options and restricted shares.

We excluded potential common shares of 8,605 and 7,667 for the three and nine months ended September 29, 2024, respectively, and 5,204 and 4,719 for the three and nine months ended October 1, 2023, respectively, from our diluted net income per share calculation as they would have had anti-dilutive effects.

We excluded potential common shares of 8,288 and 6,789 for the three months ended March 30, 2025 and March 31, 2024, respectively, from our diluted net income per share calculation as they would have had anti-dilutive effects.

(9) Stockholders’ Equity

During each of the first, second, and third quarters of 2024 and 2023, the Company paid dividends per share of $ .25 .

During both the first quarter of 2025 and the first quarter of 2024, the Company paid dividends per share of $ .25 .

Repurchases of Common Stock

In January 2023, our Board of Directors authorized a repurchase program for up to $ 500,000 of our common stock through February 28, 2027, when and if market conditions warrant and to the extent legally permissible (the “January 2023

During the three months ended March 30, 2025, the Company repurchased 8,182 shares under the January 2023 Authorization with an aggregate purchase price of $ 124,070 , of which $ 1,401 was accrued as of March 30, 2025, and excluding excise tax of $ 1,214 and commissions of $ 115 .

As of March 30, 2025, the Company had $ 110,930 of availability remaining under the January 2023 Authorization.

Subsequent to March 30, 2025 through April 25, 2025, the Company repurchased 3,843 shares under the January 2023 Authorization with an aggregate purchase price of $ 50,895 , excluding applicable excise tax and commissions.

During the three months ended March 31, 2024, the Company repurchased 392 shares under the January 2023 Authorization with an aggregate purchase price of $ 7,187 , of which $ 470 was accrued as of March 31, 2024, and excluding excise tax of $ 24 and commissions of $ 5 .

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

Authorization”).

During the nine months ended September 29, 2024, the Company repurchased 3,447 shares under the January 2023 Authorization with an aggregate purchase price of $ 59,637 , of which $ 203 was accrued as of September 29, 2024, and excluding excise tax of $ 441 and commissions of $ 49 .

As of September 29, 2024, the Company had $ 250,363 of availability remaining under the January 2023 Authorization.

Subsequent to September 29, 2024 through October 24, 2024, the Company repurchased 150 shares under the January 2023 Authorization with an aggregate purchase price of $ 2,679 , excluding applicable excise tax and commissions.

During the nine months ended October 1, 2023, the Company repurchased 6,730 shares under the January 2023 Authorization with an aggregate purchase price of $ 144,320 , of which $ 2,001 was accrued as of October 1, 2023, and excluding excise tax of $ 1,293 and commissions of $ 94 .

Accumulated Other Comprehensive Loss

The following table provides a rollforward of accumulated other comprehensive loss, which is entirely comprised of foreign currency translation:

Nine Months Ended

September 29,

2024 October 1,

Three Months Ended

2025 March 31,

Balance at beginning of period $ ( 74,753 ) $ ( 58,375 )

2 unchanged sentences

Balance at end of period $ ( 72,841 ) $ ( 62,961 )

Nature of Leases

The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties.

In addition, the Company owns sites and leases sites from third parties, which it leases and/or subleases to franchisees.

The Company also leases restaurant, office and transportation equipment.

As of September 29, 2024, the nature of restaurants operated by the Company and its franchisees was as follows:

September 29,

Company-operated restaurants:

Owned land and building 154

Owned building and held long-term land leases 145

Leased land and building 112

Total Company-operated restaurants 411

Franchisee-operated restaurants:

Company-owned properties leased to franchisees 492

Company-leased properties subleased to franchisees 1,161

Other franchisee-operated restaurants 5,228

Total franchisee-operated restaurants 6,881

Total Company-operated and franchisee-operated restaurants 7,292

(10) System Optimization Losses, Net

As of March 30, 2025, Company-operated restaurant ownership was approximately 5 % of the total system.

During the three months ended March 30, 2025, the Company did not facilitate any Franchise Flips.

During the three months ended March 31, 2024, the Company facilitated 11 Franchise Flips.

Additionally, during the three months ended March 30, 2025, the Company completed the sale of two Company-operated restaurants to franchisees.

No Company-operated restaurants were sold to or purchased from franchisees during the three months ended March 31, 2024.

Gains and losses recognized on dispositions are recorded to “System optimization losses, net” in our condensed consolidated statements of operations.

Costs related to acquisitions and dispositions under our system optimization initiative are recorded to “Reorganization and realignment costs.” All other costs incurred related to facilitating Franchise Flips are recorded to “Franchise support and other costs.”

The following is a summary of the disposition activity recorded as a result of our system optimization initiative:

Three Months Ended

2025 March 31,

Number of restaurants sold to franchisees 2 —

Proceeds from sales of restaurants $ 55 $ —

Net assets sold (a) ( 169 ) —

Other ( 25 ) —

Loss on sales of restaurants, net ( 139 ) —

Gain (loss) on sales of other assets, net (b) 49 ( 127 )

System optimization losses, net $ ( 90 ) $ ( 127 )

_______________

(a) Net assets sold consisted primarily of equipment.

(b) During the three months ended March 31, 2024, the Company received net cash proceeds of $ 26 , primarily from the sale of surplus and other properties.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

Company as Lessee

The components of lease cost are as follows:

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Finance lease cost:

Amortization of finance lease assets $ 4,779 $ 4,111 $ 13,448 $ 12,232

Interest on finance lease liabilities 10,921 10,664 32,278 32,157

15,700 14,775 45,726 44,389

Operating lease cost 21,496 21,577 64,721 64,455

Variable lease cost (a) 17,087 16,889 50,940 50,489

Short-term lease cost 1,478 1,466 4,098 4,433

Total operating lease cost (b) 40,061 39,932 119,759 119,377

Total lease cost $ 55,761 $ 54,707 $ 165,485 $ 163,766

Assets Held for Sale

As of March 30, 2025 and December 29, 2024, the Company had assets held for sale of $ 3,727 and $ 2,833 , respectively, primarily consisting of surplus properties.

Assets held for sale are included in “Prepaid expenses and other current assets.”

(11) Reorganization and Realignment Costs

The following is a summary of the initiatives included in “Reorganization and realignment costs:”

Three Months Ended

2025 March 31,

Organizational Redesign Plan $ ( 950 ) $ 5,622

Other reorganization and realignment plans 258 51

Reorganization and realignment costs $ ( 692 ) $ 5,673

Organizational Redesign

Additionally, in January 2024, the Board of Directors announced the appointment of Kirk Tanner as the Company’s new President and Chief Executive Officer, effective February 5, 2024.

Tanner succeeded Todd A.

Penegor, the Company’s previous President and Chief Executive Officer, who departed from the Company in February 2024.

The Company expects to incur total costs of approximately $ 17,000 related to the Organizational Redesign Plan, including costs related to the succession of the President and Chief Executive Officer role.

During the three months ended March 30, 2025, the Company recognized costs totaling $( 950 ), which primarily included a reversal of a severance accrual.

During the three months ended March 31, 2024, the Company recognized costs totaling $ 5,622 , which primarily included severance and related employee costs.

The Company expects to incur additional costs aggregating approximately $ 600 , comprised primarily of share-based compensation.

The Company expects costs related to the Organizational Redesign Plan to continue into 2026.

The following is a summary of the costs recorded as a result of the Organizational Redesign Plan:

Three Months Ended Total Incurred Since Inception

2025 March 31,

Severance and related employee costs (a) $ ( 1,088 ) $ 5,362 $ 12,408

Recruitment and relocation costs 13 82 736

Third-party and other costs — 50 1,116

( 1,075 ) 5,494 14,260

(a) Includes expenses for executory costs of $ 10,108 and $ 9,777 for the three months ended September 29, 2024 and October 1, 2023, respectively, and $ 30,362 and $ 29,797 for the nine months ended September 29, 2024 and October 1, 2023, respectively, for which the Company is reimbursed by sublessees.

(b) Includes $ 32,197 and $ 31,824 for the three months ended September 29, 2024 and October 1, 2023, respectively, and $ 96,270 and $ 94,751 for the nine months ended September 29, 2024 and October 1, 2023, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees.

Also includes $ 7,299 and $ 7,570 for the three months ended September 29, 2024 and October 1, 2023, respectively, and $ 22,089 and $ 22,981 for the nine months ended September 29, 2024 and October 1, 2023, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants.

Company as Lessor

The components of lease income are as follows:

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

Sales-type and direct-financing leases:

Selling profit $ 67 $ 354 $ 139 $ 1,555

Interest income (a) 7,110 7,853 22,007 23,583

Operating lease income 41,882 40,567 126,329 123,352

Variable lease income 17,432 17,000 51,609 50,055

Franchise rental income (b) $ 59,314 $ 57,567 $ 177,938 $ 173,407

Share-based compensation (b) 125 128 2,221

Total organizational redesign $ ( 950 ) $ 5,622 $ 16,481

_______________

(a) Included in “Interest expense, net.”

(b) Includes sublease income of $ 43,698 and $ 42,545 recognized during the three months ended September 29, 2024 and October 1, 2023, respectively, and $ 131,530 and $ 128,457 recognized during the nine months ended September 29, 2024 and October 1, 2023, respectively.

Sublease income includes lessees’ variable payments to the Company for executory costs of $ 10,112 and $ 9,811 for the three months ended September 29, 2024 and October 1, 2023,

(a) The three months ended March 30, 2025 includes a reversal of an accrual as a result of a change in estimate.

(b) Total incurred since inception primarily represents the accelerated recognition of share-based compensation resulting from the termination of employees under the Organizational Redesign Plan.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

respectively, and $ 30,356 and $ 29,704 for the nine months ended September 29, 2024 and October 1, 2023, respectively.

As of March 30, 2025, the accruals for the Organizational Redesign Plan are included in “Accrued expenses and other current liabilities.” The tables below present a rollforward of our accruals for the Organizational Redesign Plan.

Charges Payments Balance

Severance and related employee costs $ 4,257 $ ( 1,088 ) $ ( 1,410 ) $ 1,759

Recruitment and relocation costs — 13 ( 13 ) —

Third-party and other costs — — — —

$ 4,257 $ ( 1,075 ) $ ( 1,423 ) $ 1,759

2023 Charges Payments Balance

Severance and related employee costs $ 1,692 $ 5,362 $ ( 977 ) $ 6,077

Recruitment and relocation costs — 82 ( 82 ) —

Third-party and other costs — 50 ( 50 ) —

$ 1,692 $ 5,494 $ ( 1,109 ) $ 6,077

Other Reorganization and Realignment Plans

Costs incurred under the Company’s other reorganization and realignment plans were not material during the three months ended March 30, 2025 and March 31, 2024.

The Company does not expect to incur any material additional costs under these plans.

(12) Impairment of Long-Lived Assets

Three Months Ended

2025 March 31,

Company-operated restaurants $ 1,187 $ 1,775

Surplus properties 234 231

$ 1,421 $ 2,006

(13) Supplemental Cash Flow Information

The following table includes supplemental non-cash investing and financing activities:

Nine Months Ended

September 29,

2024 October 1,

Three Months Ended

2025 March 31,

Supplemental non-cash investing and financing activities:

1 unchanged sentence

Finance leases 17,849 3,749

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The following table includes a reconciliation of cash, cash equivalents and restricted cash:

September 29,

2025 December 29,

4 unchanged sentences

Total cash, cash equivalents and restricted cash $ 388,959 $ 503,608

(14) Guarantees and Other Commitments and Contingencies

Except as described below, the Company did not have any significant changes in guarantees and other commitments and contingencies during the current fiscal period since those reported in the Form 10-K.

Refer to the Form 10-K for further information regarding the Company’s additional commitments and obligations.

Lease Guarantees

Wendy’s has guaranteed the performance of certain leases and other obligations, primarily from former Company-operated restaurant locations now operated by franchisees, amounting to $ 100,858 as of March 30, 2025.

These leases extend through 2045.

We have had no judgments against us as guarantor of these leases as of March 30, 2025.

In the event of default by a franchise owner where Wendy’s is called upon to perform under its guarantee, Wendy’s has the ability to pursue repayment from the franchise owner.

The liability recorded for our probable exposure associated with these lease guarantees was not material as of March 30, 2025.

Letters of Credit

As of March 30, 2025, the Company had outstanding letters of credit with various parties totaling $ 28,985 .

Substantially all of the outstanding letters of credit include amounts outstanding against the 2021-1 Variable Funding Senior Secured Notes, Class A-1.

We do not expect any material loss to result from these letters of credit.

(15) Transactions with Related Parties

2 unchanged sentences

A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen, which are then subleased to franchisees for the operation of Wendy’s/Tim Hortons combo units in Canada.

Wendy’s paid TimWen $ 16,065 and $ 15,713 under these lease agreements during the nine months ended September 29, 2024 and October 1, 2023, respectively, which is recorded to “Franchise rental expense.” In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $ 179 and $ 181 during the nine months ended September 29, 2024 and October 1, 2023, respectively, which is included as a reduction to “General and administrative.”

Wendy’s paid TimWen $ 4,798 and $ 5,030 under these lease agreements during the three months ended March 30, 2025 and March 31, 2024, respectively, which has been recorded to “Franchise rental expense.” In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $ 56 and $ 60 during the three months ended March 30, 2025 and March 31, 2024, respectively, which is included as a reduction to “General and administrative.”

Transactions with QSCC

10 unchanged sentences

Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend.

Wendy’s recorded its share of patronage dividends of $ 3,493 during the nine months ended September 29, 2024, of which $ 2,909 is included in “Other operating income, net” and $ 584 is included as a reduction of “Cost of sales.” Wendy’s recorded its share of patronage dividends of $ 363 during the nine months ended October 1, 2023, all of which is included as a reduction of “Cost of sales.”

Wendy’s recorded its share of patronage dividends of $ 3,096 during the three months ended March 31, 2024, of which $ 2,909 is included in “Other operating income, net” and $ 187 is included as a reduction of “Cost of sales.” There were no patronage dividends recorded during the three months ended March 30, 2025.

Transactions with Yellow Cab

Certain family members and/or affiliates of Mr.

Nelson Peltz, our former Chairman, Mr.

Nelson Peltz, our former Chairman and Chairman Emeritus, Mr.

Peter May, our Senior Vice Chairman, and Mr.

Matthew Peltz, our Vice Chairman, hold minority ownership interests in Yellow Cab Holdings, LLC (“Yellow Cab”), a Wendy’s franchisee, that as of September 29, 2024 owns and operates 87 Wendy’s restaurants, and/or certain of the operating companies managed by Yellow Cab.

During the nine months ended September 29, 2024 and October 1, 2023, the Company recognized $ 11,397 and $ 11,143 , respectively, in royalty, advertising fund, lease and other income from Yellow Cab and related entities.

Matthew Peltz, our Vice Chairman, hold minority ownership interests in Yellow Cab Holdings, LLC (“Yellow Cab”), a Wendy’s franchisee that, as of March 30, 2025 owned and operated 89 Wendy’s restaurants, and/or certain of the operating companies managed by Yellow Cab.

During the three months ended March 30, 2025 and March 31, 2024, the Company recognized $ 3,664 and $ 3,612 , respectively, in royalty, advertising fund, lease and other income from Yellow Cab and related entities.

In all transactions involving Yellow Cab, the Company’s standard franchisee recruiting and approval processes were followed, no modifications were made to the Company’s standard franchise agreements or related documents, and all deal terms and transaction documents were negotiated and executed on an arm’s-length basis, consistent with the Company’s comparable franchise transactions and relationships.

As of September 29, 2024 and December 31, 2023, $ 1,099 and $ 1,153 , respectively, was due from Yellow Cab for such income, which is included in “Accounts and notes receivable, net” and “Advertising funds restricted assets.”

As of March 30, 2025 and December 29, 2024, $ 1,156 and $ 1,132 , respectively, was due from Yellow Cab for such income, which is included in “Accounts and notes receivable, net” and “Advertising funds restricted assets.”

Transactions with AMC

1 unchanged sentence

Kristin Dolan, a director of the Company, was appointed as the Chief Executive Officer of AMC Networks Inc.

During the nine months ended September 29, 2024 and October 1, 2023, the Company purchased approximately $ 1,600 and $ 1,800 , respectively, of advertising time from a subsidiary of AMC.

During the three months ended March 30, 2025 and March 31, 2024, the Company purchased approximately $ 300 and $ 500 , respectively, of advertising time from a subsidiary of AMC.

The Company’s advertising spend with AMC was made in the ordinary course of business and approved on an arm’s-length basis, consistent with the Company’s comparable advertising decisions.

As of December 31, 2023, approximately $ 584 was due to AMC for such advertising time, which is included in “Advertising funds restricted liabilities.” There were no amounts due to AMC as of September 29, 2024.

(14) Guarantees and Other Commitments and Contingencies

Refer to the Form 10-K for further information regarding the Company’s additional commitments and obligations.

Franchisee Incentive Programs

To promote new restaurant development, Wendy’s has provided franchisees with certain incentive programs for qualifying new restaurants.

In July and September 2024, Wendy’s announced a new development incentive structure in the U.S.

and Canada and select international markets, respectively, that provides for reductions in royalty and national advertising fees for qualifying new restaurants for two, three or four years of operation based on the number of restaurants committed to under the development agreement.

Lease Guarantees

These leases extend through 2045.

We have had no judgments against us as guarantor of these leases as of September 29, 2024.

In the event of default by a franchise owner where Wendy’s is called upon to perform under its guarantee, Wendy’s has the ability to pursue repayment from the franchise owner.

The liability recorded for our probable exposure associated with these lease guarantees was not material as of September 29, 2024.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Letters of Credit

As of September 29, 2024, the Company had outstanding letters of credit with various parties totaling $ 28,673 .

Substantially all of the outstanding letters of credit include amounts outstanding against the 2021-1 Variable Funding Senior Secured Notes, Class A-1.

We do not expect any material loss to result from these letters of credit.

Purchase and Capital Commitments

The Company has material purchase requirements under a marketing agreement with two national broadcasters and a beverage agreement with a vendor.

In August 2024, the Company amended its contract with the beverage vendor, which now expires upon reaching a threshold usage requirement or, if certain undertakings are not fulfilled, at the later of reaching a threshold usage requirement or December 31, 2034.

Our total purchase requirements under the marketing agreement and the amended beverage agreement are estimated to be approximately $ 107,500 over the remaining life of the contracts.

As of March 30, 2025 and December 29, 2024, approximately $ 26 and $ 17 , respectively, was due to AMC for such advertising time, which is included in “Advertising funds restricted liabilities.”

(16) Legal and Environmental Matters

1 unchanged sentence

We provide accruals for such litigation and claims when we determine it is probable that a liability has been incurred and the loss is reasonably estimable.

The Company believes it has adequate accruals for all of our legal and environmental matters.

The Company believes it has adequate accruals for all of its legal and environmental matters.

We cannot estimate the aggregate possible range of loss for our existing litigation and claims due to various reasons, including, but not limited to, many proceedings being in preliminary stages, with various motions either yet to be submitted or pending, discovery yet to occur and significant factual matters unresolved.

1 unchanged sentence

Predicting the outcomes of settlement discussions or judicial or arbitral decisions is thus inherently difficult and future developments could cause these actions or claims, individually or in aggregate, to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows of a particular reporting period.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(17) Segment Information

Revenues by segment are as follows:

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

revenue, significant segment expenses and segment adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) are as follows:

Three Months Ended

2025 March 31,

revenue $ 429,614 $ 442,847

Cost of sales 181,237 185,933

Franchise support and other costs 13,178 12,694

Advertising fund expense (a) 91,760 99,025

General and administrative 22,424 19,326

Other segment items (b) 38 45

adjusted EBITDA $ 120,977 $ 125,824

_______________

Wendy’s International 37,598 35,167 106,774 97,162

Global Real Estate & Development 60,416 58,148 181,282 176,784

Total revenues $ 566,739 $ 550,555 $ 1,672,219 $ 1,640,927

(a) Includes advertising fund expense of $ 2,325 for the three months ended March 31, 2024 related to the Company’s funding of incremental advertising.

There was no funding of incremental advertising during the three months ended March 30, 2025.

(b) Other segment items for the three months ended March 30, 2025 primarily include lease buyout activity and professional fees.

Other segment items for the three months ended March 31, 2024 primarily include professional fees.

Wendy’s International revenue, significant segment expenses and segment adjusted EBITDA are as follows:

Three Months Ended

March 30, 2025 March 31,

Wendy’s International revenue $ 34,721 $ 32,815

Wendy’s International expense

Cost of sales 6,932 6,180

Advertising fund expense (a) 9,912 8,556

General and administrative 6,437 5,941

Other segment items (b) 1,996 1,448

Wendy’s International adjusted EBITDA $ 9,444 $ 10,690

_______________

(a) Includes advertising fund expense of $ 159 and $ 162 for the three months ended March 30, 2025 and March 31, 2024, respectively, related to the Company’s funding of incremental advertising.

In addition, includes other international-related advertising deficit of $ 1,153 and $ 150 for the three months ended March 30, 2025 and March 31, 2024, respectively.

(b) Other segment items for the three months ended March 30, 2025 and March 31, 2024 primarily include franchise support and other costs.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

Global Real Estate & Development revenue, significant segment expenses and segment adjusted EBITDA are as follows:

Three Months Ended

March 30, 2025 March 31, 2024

Global Real Estate & Development revenue $ 59,137 $ 59,091

Global Real Estate & Development expense

Franchise rental expense 30,701 31,778

General and administrative 5,220 5,100

Other segment items (a) ( 1,460 ) ( 1,848 )

Global Real Estate & Development adjusted EBITDA $ 24,676 $ 24,061

_______________

(a) Other segment items primarily include equity in earnings from our TimWen joint venture, franchise support and other costs and gains on sales-type leases.

Equity in earnings from our TimWen joint venture was $ 2,252 and $ 2,522 for the three months ended March 30, 2025 and March 31, 2024, respectively.

The following table reconciles profit by segment to the Company’s consolidated income before income taxes:

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

(a) $ 129,790 $ 134,887 $ 392,323 $ 403,064

Wendy’s International (b) 11,046 10,831 32,411 26,808

Three Months Ended

2025 March 31,

$ 120,977 $ 125,824

Wendy’s International 9,444 10,690

Global Real Estate & Development 24,676 24,061

Total segment profit 168,073 170,136 $ 504,214 $ 505,892

Total segment adjusted EBITDA 155,097 160,575

Unallocated franchise support and other costs ( 587 ) ( 26 )

Advertising funds deficit 190 1,088 651 3,509

Unallocated general and administrative (c) ( 32,443 ) ( 30,962 ) ( 98,289 ) ( 96,776 )

Advertising funds surplus 144 207

Unallocated general and administrative (a) ( 34,123 ) ( 33,390 )

Depreciation and amortization (exclusive of amortization of cloud computing arrangements shown separately below) ( 36,549 ) ( 35,518 )

Amortization of cloud computing arrangements ( 4,167 ) ( 3,542 )

System optimization gains, net 420 120 573 119

System optimization losses, net ( 90 ) ( 127 )

Reorganization and realignment costs 692 ( 5,673 )

2 unchanged sentences

Interest expense, net ( 31,477 ) ( 30,535 )

Loss on early extinguishment of debt — ( 319 ) — ( 1,585 )

Investment income (loss), net — — 11 ( 10,389 )

Investment loss, net ( 1,718 ) —

Other income, net 4,986 6,836

1 unchanged sentence

_______________

(a) Wendy’s U.S.

includes advertising funds expense of $ 5,977 and $ 13,386 for the three and nine months ended September 29, 2024 related to the Company’s funding of incremental advertising.

(b) Wendy’s International includes advertising funds expense of $ 622 and $ 1,387 for the three and nine months ended September 29, 2024, respectively, and $ 596 and $ 1,802 for the three and nine months ended October 1, 2023, respectively, related to the Company’s funding of incremental advertising in Canada.

In addition, Wendy’s International includes other international-related advertising (deficit) surplus of $( 170 ) and $( 640 ) for the three and nine months ended September 29, 2024, respectively, and $ 535 and $( 789 ) for the three and nine months ended October 1, 2023, respectively.

(a) Includes corporate overhead costs, such as employee compensation and related benefits.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(18) New Accounting Standards

New Accounting Standard Adopted

Common-Control Lease Arrangements

In March 2023, the Financial Accounting Standards Board (“FASB”) issued an update to amend certain lease accounting guidance that applies to arrangements between related parties under common control.

The amendment requires a lessee in a common-control lease arrangement to amortize leasehold improvements that it owns over the useful life of the improvements to the common-control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease.

The Company adopted this amendment during the first quarter of 2024.

The adoption of this amendment did not have a material impact on our condensed consolidated financial statements.

Disaggregation of Income Statement Expenses

In November 2024, the Financial Accounting Standards Board (“FASB”) issued an amendment to expand disclosure requirements related to certain income statement expenses.

The amendment requires disaggregation of certain expense captions into specified categories in disclosures within the notes to the financial statements.

We are currently evaluating the impact of the adoption of this guidance on our condensed consolidated financial statements.

In January 2025, the FASB issued an update that clarified that the amendment is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements