What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-08 · 122 added, 118 removed, 292 unchanged (45% of the section changed)

2 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 (the “Form 10-K”).

There have been no material changes as of June 29, 2025 to the application of our critical accounting policies as described in Item 7 of the Form 10-K.

There have been no material changes as of September 28, 2025 to the application of our critical accounting policies as described in Item 7 of the Form 10-K.

Certain statements we make under this Item 2 constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995.

13 unchanged sentences

and 35 foreign countries and U.S.

territories as of June 29, 2025.

territories as of September 28, 2025.

Each Wendy’s restaurant offers an extensive menu specializing in hamburger sandwiches and featuring chicken sandwiches, which are prepared to order with the customer’s choice of toppings and condiments.

19 unchanged sentences

The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31.

All three- and six-month periods presented herein contain 13 weeks and 26 weeks, respectively.

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

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

Executive Overview

As of June 29, 2025, the Wendy’s restaurant system was comprised of 7,334 restaurants, with 5,967 Wendy’s restaurants in operation in the U.S.

As of September 28, 2025, the Wendy’s restaurant system was comprised of 7,363 restaurants, with 5,979 Wendy’s restaurants in operation in the U.S.

restaurants, 421 were operated by the Company and 5,558 were operated by a total of 202 franchisees.

In addition, at June 29, 2025, there were 1,367 Wendy’s restaurants in operation in 35 foreign countries and U.S.

In addition, at September 28, 2025, there were 1,384 Wendy’s restaurants in operation in 35 foreign countries and U.S.

Of the international restaurants, 1,370 were operated by a total of 113 franchisees and 14 were operated by the Company in the United Kingdom (the “U.K.”).

1 unchanged sentence

(1) sales at Company-operated restaurants and (2) franchise-related revenues, including royalties, national advertising funds contributions, rents and franchise fees received from Wendy’s franchised restaurants.

Company-operated restaurants comprised approximately 5% of the total Wendy’s system as of June 29, 2025.

Company-operated restaurants comprised approximately 5% of the total Wendy’s system as of September 28, 2025.

Wendy’s operating results are impacted by a number of external factors, including commodity costs, labor costs, intense price competition, unemployment and consumer spending levels, general economic and market trends and weather.

Wendy’s strategic framework includes providing fresh, famous food to consumers, delivering an exceptional customer experience through operational excellence and expanding the Company’s footprint across the globe.

Our opportunities to execute on this framework for long-term profitable growth include (1) driving same-restaurant sales and market share growth, (2) accelerating digital growth, (3) improving restaurant profitability and (4) driving global unit growth.

The Company recently announced Project Fresh , a comprehensive plan to drive profitable growth and long-term value across our U.S.

The four strategic pillars of Project Fresh include (1) brand revitalization, (2) operational excellence, (3) system optimization and (4) capital allocation.

These pillars are designed to attract new customers to Wendy’s through more compelling marketing and to increase traffic by providing an exceptional customer experience.

Internationally, the Company’s strategic priorities also include sustaining strong net unit growth.

Key Business Measures

8 unchanged sentences

Therefore, as Company-operated restaurant margin as presented excludes certain costs as described above, its usefulness may be limited and may not be comparable to other similarly titled measures of other companies in our industry.

Company-operated restaurant margin is influenced by factors such as price increases, the effectiveness of our advertising and marketing initiatives, featured products, product mix, fluctuations in food and labor costs, restaurant openings, remodels and closures and the level of our fixed and semi-variable costs.

Company-operated restaurant margin is influenced by factors such as menu prices, the effectiveness of our advertising and marketing initiatives, featured products, product mix, fluctuations in food and labor costs, restaurant openings, remodels and closures and the level of our fixed and semi-variable costs.

• Systemwide Sales – Systemwide sales includes sales by both Company-operated restaurants and franchised restaurants.

13 unchanged sentences

With respect to same-restaurant sales and systemwide sales, the Company also believes that the data is useful in assessing consumer demand for the Company’s products and the overall success of the Wendy’s brand.

Second Quarter Highlights

• Global systemwide sales decreased 1.9% to $3.66 billion in the second quarter of 2025 compared with $3.73 billion in the second quarter of 2024;

• Revenues decreased 1.7% to $560.9 million in the second quarter of 2025 compared with $570.7 million in the second quarter of 2024;

Third Quarter Highlights

• Global systemwide sales decreased 2.7% to $3.5 billion in the third quarter of 2025 compared with $3.6 billion in the third quarter of 2024;

• Revenues decreased 3.0% to $549.5 million in the third quarter of 2025 compared with $566.7 million in the third quarter of 2024;

• Global same-restaurant sales decreased 3.7%, U.S.

same-restaurant sales decreased 3.6% and international same-restaurant sales increased 1.8% compared with the second quarter of 2024.

same-restaurant sales decreased 4.7% and international same-restaurant sales increased 3.0% compared with the third quarter of 2024.

On a two-year basis, global same-restaurant sales decreased 3.5%;

• Global Company-operated restaurant margin was 15.6% in the second quarter of 2025, a decrease of 20 basis points compared with the second quarter of 2024;

• Income before income taxes increased 1.4% to $75.9 million in the second quarter of 2025 compared with $74.8 million in the second quarter of 2024;

• Digital sales increased to approximately 20.5% of global systemwide sales in the second quarter of 2025 compared with approximately 17.0% in the second quarter of 2024;

• Systemwide restaurant count increased by 26 net new restaurants in the second quarter of 2025.

• Global Company-operated restaurant margin was 12.4% in the third quarter of 2025, a decrease of 270 basis points compared with the third quarter of 2024;

• Income before income taxes decreased 9.2% to $63.2 million in the third quarter of 2025 compared with $69.7 million in the third quarter of 2024;

• Digital sales increased to approximately 21.0% of global systemwide sales in the third quarter of 2025 compared with approximately 17.6% in the third quarter of 2024;

• Systemwide restaurant count increased by 29 net new restaurants in the third quarter of 2025.

Year-to-Date Highlights

• Global systemwide sales decreased 1.8% to $7.05 billion in the first six months of 2025 compared with $7.18 billion in the first six months of 2024;

• Revenues decreased 1.9% to $1.08 billion in the first six months of 2025 compared with $1.11 billion in the first six months of 2024;

• Global systemwide sales decreased 2.1% to $10.6 billion in the first nine months of 2025 compared with $10.8 billion in the first nine months of 2024;

• Revenues decreased 2.3% to $1.6 billion in the first nine months of 2025 compared with $1.7 billion in the first nine months of 2024;

• Global same-restaurant sales decreased 2.9%, U.S.

same-restaurant sales decreased 3.2% and international same-restaurant sales increased 2.1% compared with the first six months of 2024.

same-restaurant sales decreased 3.7% and international same-restaurant sales increased 2.4% compared with the first nine months of 2024.

On a two-year basis, global same restaurant sales decreased 2.2%;

• Global Company-operated restaurant margin was 15.0% in the first six months of 2025, a decrease of 30 basis points compared with the first six months of 2024;

• Income before income taxes decreased 1.1% to $130.8 million in the first six months of 2025 compared with $132.3 million in the first six months of 2024;

• Digital sales increased to approximately 20.4% of global systemwide sales in the first six months of 2025 compared with approximately 16.9% in the first six months of 2024;

• Systemwide restaurant count increased by 94 net new restaurants in the first six months of 2025.

• Global Company-operated restaurant margin was 14.1% in the first nine months of 2025, a decrease of 110 basis points compared with the first nine months of 2024;

• Income before income taxes decreased 3.9% to $194.1 million in the first nine months of 2025 compared with $201.9 million in the first nine months of 2024;

• Digital sales increased to approximately 20.6% of global systemwide sales in the first nine months of 2025 compared with approximately 17.1% in the first nine months of 2024;

• Systemwide restaurant count increased by 123 net new restaurants in the first nine months of 2025.

Results of Operations

The tables included throughout this Results of Operations section set forth in millions the Company’s condensed consolidated results of operations for the second quarter and first six months of 2025 and 2024.

Second Quarter Six Months

The tables included throughout this Results of Operations section set forth in millions the Company’s condensed consolidated results of operations for the third quarter and first nine months of 2025 and 2024.

Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

24 unchanged sentences

Net income $ 44.3 $ 50.2 $ (5.9) $ 138.6 $ 146.9 $ (8.3)

Second Quarter Six Months

Third Quarter Nine Months

Total Revenues 2024 % of

13 unchanged sentences

$ 549.5 100.0 % $ 566.7 100.0 % $ 1,633.9 100.0 % $ 1,672.2 100.0 %

Second Quarter Six Months

Third Quarter Nine Months

Sales 2024 % of

7 unchanged sentences

Total cost of sales $ 204.3 87.6 % $ 195.6 84.9 % $ 588.9 85.9 % $ 587.6 84.8 %

Second Quarter Six Months

Third Quarter Nine Months

Sales 2024 % of

5 unchanged sentences

The table below presents certain of the Company’s key business measures, which are defined and further discussed in the “Executive Overview” section included herein.

Second Quarter Six Months

Third Quarter Nine Months

2025 2024 2025 2024

19 unchanged sentences

(a) Excludes Argentina due to the impact of that country’s highly inflationary economy.

(b) During the second quarter of 2025 and 2024, global systemwide sales decreased 1.8% and increased 2.6%, respectively, U.S.

(b) During the third quarter of 2025 and 2024, global systemwide sales decreased 2.6% and increased 1.8%, respectively, U.S.

systemwide sales decreased 4.4% and increased 0.9%, respectively, and international systemwide sales increased 8.6% and 7.7%, respectively, on a constant currency basis.

During the first six months of 2025 and 2024, global systemwide sales decreased 1.4% and increased 2.6%, respectively, U.S.

During the first nine months of 2025 and 2024, global systemwide sales decreased 1.8% and increased 2.3%, respectively, U.S.

systemwide sales decreased 3.4% and increased 1.4%, respectively, and international systemwide sales increased 8.7% and 8.3%, respectively, on a constant currency basis.

Second Quarter

Third Quarter

Company-operated U.S.

1 unchanged sentence

Restaurant count:

Restaurant count at March 30, 2025

Restaurant count at June 29, 2025

387 5,580 13 1,354 7,334

1 unchanged sentence

Closed (2) (9) — (14) (25)

Restaurant count at June 29, 2025

Net purchased from (sold by) franchisees 32 (32) — — —

Restaurant count at September 28, 2025

421 5,558 14 1,370 7,363

5 unchanged sentences

Closed (2) (24) — (23) (49)

Net (sold to) purchased by franchisees (2) 2 — — —

Restaurant count at June 29, 2025

Net purchased from (sold by) franchisees 30 (30) — — —

Restaurant count at September 28, 2025

421 5,558 14 1,370 7,363

Sales Second Quarter Six Months

Sales Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Sales $ 233.2 $ 230.4 $ 2.8 $ 685.5 $ 693.1 $ (7.6)

The decrease in sales during the second quarter and the first six months of 2025 was primarily due to (1) a 0.8% and 1.0% decrease in global Company-operated same-restaurant sales of $2.0 million and $4.3 million, respectively, and (2) net closures of Company-operated restaurants of $1.4 million and $4.6 million, respectively.

The increase in sales during the third quarter of 2025 was primarily due to the Company’s acquisition of 35 franchise-operated restaurants of $6.4 million, partially offset by (1) a 0.7% decrease in global Company-operated same-restaurant sales of $2.4 million and (2) net closures of Company-operated restaurants of $0.6 million.

The decrease in sales during the first nine months of 2025 was primarily due to (1) a 0.9% decrease in global Company-operated same-restaurant sales of $7.9 million and (2) net closures of Company-operated restaurants of $3.8 million, partially offset by the Company’s acquisition of 35 franchise-operated restaurants of $6.4 million.

Company-operated same-restaurant sales decreased due to a decrease in traffic, partially offset by higher average check.

Franchise Royalty Revenue and Fees Second Quarter Six Months

Franchise Royalty Revenue and Fees Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

2 unchanged sentences

$ 152.0 $ 153.9 $ (1.9) $ 453.5 $ 458.0 $ (4.5)

Franchise royalty revenue during the second quarter and the first six months of 2025 decreased primarily due to a 3.0% and 2.6% decrease in global franchise same-restaurant sales, respectively.

Franchise same-restaurant sales during the second quarter and the first six months of 2025 decreased due to a decrease in traffic, partially offset by higher average check.

The increase in franchise fees during the second quarter and the first six months of 2025 was primarily due to higher fees for providing information technology services to franchisees.

Franchise Rental Income Second Quarter Six Months

Franchise royalty revenue during the third quarter and the first nine months of 2025 decreased primarily due to a 3.9% and 3.0% decrease in global franchise same-restaurant sales, respectively.

Franchise same-restaurant sales during the third quarter and the first nine months of 2025 decreased due to a decrease in traffic, partially offset by higher average check.

The increase in franchise fees during the third quarter and the first nine months of 2025 was primarily due to higher fees for providing information technology services to franchisees.

Franchise Rental Income Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Franchise rental income $ 57.3 $ 59.3 $ (2.0) $ 176.2 $ 177.9 $ (1.7)

The decrease in franchise rental income during the second quarter of 2025 was primarily due to the impact of assigning certain leases to franchisees in the prior year of $1.5 million.

This decrease was partially offset by (1) entering into new leases of $0.6 million and (2) amending certain existing leases of $0.5 million.

The increase in franchise rental income during the first six months of 2025 was primarily due to (1) amending certain existing leases of $1.6 million and (2) entering into new leases of $1.3 million.

These increases were partially offset by the impact of assigning certain leases to franchisees of $2.1 million.

Advertising Funds Revenue Second Quarter Six Months

The decrease in franchise rental income during the third quarter and the first nine months of 2025 was primarily due to the impact of assigning certain existing leases to franchisees of $2.9 million and $4.9 million, respectively.

This impact during the first nine months of 2025 was partially offset by (1) entering into new leases of $1.7 million and (2) amending certain existing leases of $1.7 million.

Advertising Funds Revenue Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Advertising funds revenue $ 107.0 $ 123.1 $ (16.1) $ 318.7 $ 343.2 $ (24.5)

The decrease in advertising funds revenue during the second quarter and the first six months of 2025 was primarily due to a decrease in franchise same-restaurant sales in the U.S.

Cost of Sales, as a Percent of Sales Second Quarter Six Months

The decrease in advertising funds revenue during the third quarter and the first nine months of 2025 was primarily due to (1) promotional activity in the prior year of $12.0 million and (2) a decrease in franchise same-restaurant sales in the U.S.

of $5.7 million and $12.3 million, respectively.

Cost of Sales, as a Percent of Sales Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

3 unchanged sentences

87.6 % 84.9 % 2.7 % 85.9 % 84.8 % 1.1 %

The increase in cost of sales, as a percent of sales, during the second quarter and the first six months of 2025 was primarily due to (1) higher commodity costs, (2) an increase in restaurant labor rates and (3) a decrease in traffic.

These impacts were partially offset by (1) labor efficiencies and (2) higher average check.

Franchise Support and Other Costs Second Quarter Six Months

The increase in cost of sales, as a percent of sales, during the third quarter and the first nine months of 2025 was primarily due to (1) higher commodity costs, (2) a decrease in traffic and (3) an increase in restaurant labor rates.

These changes were partially offset by (1) higher average check and (2) labor efficiencies.

Franchise Support and Other Costs Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Franchise support and other costs $ 17.5 $ 16.0 $ 1.5 $ 51.2 $ 47.0 $ 4.2

The increase in franchise support and other costs during the second quarter and the first six months of 2025 was primarily due to an increase in costs incurred to provide information technology services and other services to franchisees.

Franchise Rental Expense Second Quarter Six Months

The increase in franchise support and other costs during the third quarter and the first nine months of 2025 was primarily due to an increase in costs incurred to provide information technology services and other services to franchisees.

Franchise Rental Expense Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Franchise rental expense $ 30.9 $ 32.2 $ (1.3) $ 94.3 $ 96.4 $ (2.1)

The decrease in franchise rental expense during the first six months of 2025 was primarily due to the impact of terminating certain existing leases.

Advertising Funds Expense Second Quarter Six Months

The decrease in franchise rental expense during the third quarter and the first nine months of 2025 was primarily due to the impact of assigning certain existing leases to franchisees.

Advertising Funds Expense Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

1 unchanged sentence

On an interim basis, advertising funds expense is recognized in proportion to advertising funds revenue.

The decrease in advertising funds expense during the second quarter and the first six months of 2025 was primarily due to (1) the same factor as described above for “Advertising Funds Revenue” and (2) a decrease in the recognition of the Company breakfast advertising spend in excess of advertising funds revenue when compared to the prior year.

General and Administrative Second Quarter Six Months

The decrease in advertising funds expense during the third quarter and the first nine months of 2025 was primarily due to (1) the same factors as described above for “Advertising Funds Revenue” and (2) a decrease in the recognition of the Company breakfast advertising spend in excess of advertising funds revenue when compared to the prior year.

General and Administrative Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Employee compensation and benefits $ 38.0 $ 35.2 $ 2.8 $ 113.0 $ 103.4 $ 9.6

Share-based compensation (1.0) 6.7 (7.7) 9.5 17.8 (8.3)

Incentive compensation 5.0 2.5 2.5 13.1 15.0 (1.9)

Professional fees 12.5 14.9 (2.4) 40.5 42.2 (1.7)

Other, net 3.4 3.5 (0.1) 9.5 9.6 (0.1)

$ 57.9 $ 62.8 $ (4.9) $ 185.6 $ 188.0 $ (2.4)

The decrease in general and administrative expenses during the second quarter of 2025 was primarily due to a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2025 versus 2024.

This decrease was partially offset by higher employee compensation and benefits.

The increase in general and administrative expenses during the first six months of 2025 was primarily due to higher employee compensation and benefits, partially offset by a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2025 versus 2024.

Depreciation and Amortization (exclusive of amortization of cloud computing arrangements shown separately below) Second Quarter Six Months

The decrease in general and administrative expenses during the third quarter of 2025 was primarily due to lower share-based compensation as a result of the departure of the Company’s previous President and Chief Executive Officer.

The decrease in general and administrative expenses during the first nine months of 2025 was primarily due to (1) lower share-based compensation as a result of the departure of the Company’s previous President and Chief Executive Officer, (2) a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2025 versus 2024 and (3) a decrease in professional fees.

These changes were partially offset by higher employee compensation and benefits.

Depreciation and Amortization (exclusive of amortization of cloud computing arrangements shown separately below) Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

2 unchanged sentences

$ 38.4 $ 37.0 $ 1.4 $ 111.9 $ 110.0 $ 1.9

The change in depreciation and amortization during the second quarter and the first six months of 2025 was primarily due to depreciation and amortization for technology investments.

Amortization of Cloud Computing Arrangements Second Quarter Six Months

The increase in depreciation and amortization during the third quarter and the first nine months of 2025 was primarily due to asset additions for new and remodeled restaurants.

Amortization of Cloud Computing Arrangements Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Amortization of cloud computing arrangements $ 5.2 $ 3.6 $ 1.6 $ 13.4 $ 10.6 $ 2.8

The increase in amortization of cloud computing arrangements during the second quarter and the first six months of 2025 was primarily due to amortization of assets associated with the Company’s digital investments.

Reorganization and Realignment Costs Second Quarter Six Months

The increase in amortization of cloud computing arrangements during the third quarter and the first nine months of 2025 was primarily due to amortization of assets associated with the Company’s digital investments.

Reorganization and Realignment Costs Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

2 unchanged sentences

$ 0.3 $ 0.4 $ (0.1) $ (0.2) $ 8.5 $ (8.7)

During the first six months of 2025, the Company recognized costs under the Organizational Redesign Plan of ($0.8) million, which primarily included a reversal of a severance accrual as a result of a change in estimate.

During the second quarter and the first six months of 2024, the Company recognized costs under the Organizational Redesign Plan of $2.4 million and $8.0 million, respectively, which primarily included severance and related employee costs.

During the first nine months of 2025, the Company recognized costs under the Organizational Redesign Plan of ($0.8) million, which primarily included a reversal of a severance accrual as a result of a change in estimate.

During the first nine months of 2024, the Company recognized costs under the Organizational Redesign Plan of $8.3 million, which primarily included severance and related employee costs.

See Note 12 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information on the Organizational Redesign Plan.

Impairment of Long-Lived Assets Second Quarter Six Months

Impairment of Long-Lived Assets Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Impairment of long-lived assets $ 2.3 $ 0.2 $ 2.1 $ 5.4 $ 2.9 $ 2.5

The increase in impairment of long-lived assets during the second quarter and the first six months of 2025 was primarily due to higher impairment charges resulting from the deterioration in operating performance of certain Company-operated restaurants.

Other Operating Income, Net Second Quarter Six Months

The increase in impairment of long-lived assets during the third quarter and the first nine months of 2025 was primarily due to higher impairment charges as a result of the deterioration in operating performance of certain Company-operated restaurants.

Other Operating Income, Net Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

3 unchanged sentences

$ 7.0 $ 5.1 $ 1.9 $ 16.3 $ 11.4 $ 4.9

The decrease in other operating income, net during the second quarter of 2025 was primarily due to a decrease in lease buyout activity.

The increase in other operating income, net during the first six months of 2025 was primarily due to the settlement of a claim.

Interest Expense, Net Second Quarter Six Months

The increase in other operating income, net during the third quarter of 2025 was primarily due to an increase in lease buyout activity.

The increase in other operating income, net during the first nine months of 2025 was primarily due to the settlement of a claim.

Interest Expense, Net Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Interest expense, net $ 31.5 $ 31.3 $ 0.2 $ 94.0 $ 92.8 $ 1.2

The increase in interest expense, net during the first six months of 2025 was primarily due to lower interest income as a result of amending certain sales-type and direct financing leases.

Investment Loss, Net Second Quarter Six Months

The increase in interest expense, net during the first nine months of 2025 was primarily due to lower interest income as a result of amending certain sales-type and direct financing leases.

Investment Loss, Net Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Investment loss, net $ — $ — $ — $ 1.7 $ — $ 1.7

During the first six months of 2025, the Company recorded a loss of $1.7 million due to impairment charges for the difference between the estimated fair value and the carrying value of an investment in equity securities.

Other Income, Net Second Quarter Six Months

During the first nine months of 2025, the Company recorded a loss of $1.7 million due to impairment charges for the difference between the estimated fair value and the carrying value of an investment in equity securities.

Other Income, Net Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Other income, net $ 2.8 $ 6.3 $ (3.5) $ 10.4 $ 19.4 $ (9.0)

The decrease in other income, net during the second quarter and the first six months of 2025 was primarily due to a decrease in interest income, reflecting lower balances of cash equivalents.

Provision for Income Taxes Second Quarter Six Months

The decrease in other income, net during the third quarter and the first nine months of 2025 was primarily due to a decrease in interest income, reflecting lower balances of cash equivalents.

Provision for Income Taxes Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

4 unchanged sentences

30.0 % 27.9 % 2.1 % 28.6 % 27.3 % 1.3 %

The effective tax rates for the second quarter and the first six months of 2025 and 2024 were impacted by variations in income before income taxes, adjusted for recurring items such as non-deductible expenses and state income taxes, as well as non-recurring discrete items.

The increase in the effective tax rate for the second quarter and the first six months of 2025 was primarily due to the tax effects of share-based compensation.

The effective tax rate for the first six months of 2025 also increased due to a one-time adjustment to our deferred income taxes related to prior periods.

The effective tax rates for the third quarter and the first nine months of 2025 and 2024 were impacted by variations in income before income taxes, adjusted for recurring items such as non-deductible expenses and state income taxes, as well as non-recurring discrete items.

The increase in the effective tax rate for the third quarter and the first nine months of 2025 was primarily due to state income taxes and the tax effects of our foreign operations, partially offset by the tax effects of share-based compensation.

Segment Information

See Note 18 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information regarding the Company’s segments.

Second Quarter Six Months

Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

6 unchanged sentences

The decrease in Wendy’s U.S.

revenues during the second quarter and the first six months of 2025 was primarily due to (1) a decrease in same-restaurant sales and (2) net closures of restaurants.

Same-restaurant sales decreased during the second quarter and the first six months of 2025 primarily due to a decrease in traffic, partially offset by higher average check.

The increase in Wendy’s U.S.

segment profit during the second quarter of 2025 was primarily due to a decrease in the Company’s funding of incremental advertising.

This change was partially offset by (1) lower revenues, (2) higher general and administrative expense and (3) higher cost of sales, as a percent of sales for Company-operated restaurants driven by the same factors as described above for “Cost of Sales, as a Percent of Sales.”

revenues during the third quarter and the first nine months of 2025 was primarily due to (1) lower advertising fund revenue and (2) a decrease in same-restaurant sales.

Same-restaurant sales decreased during the third quarter and the first nine months of 2025 primarily due to a decrease in traffic, partially offset by higher average check.

These changes were partially offset by the Company’s acquisition of 35 franchise-operated restaurants.

The decrease in Wendy’s U.S.

segment profit during the first six months of 2025 was primarily due to (1) lower revenues, (2) higher general and administrative expense and (3) higher cost of sales, as a percent of sales for Company-operated restaurants driven by the same factors as described above for “Cost of Sales, as a Percent of Sales.” These changes were partially offset by a decrease in the Company’s funding of incremental advertising.

segment profit during the third quarter and the first nine months of 2025 was primarily due to (1) lower revenues, (2) higher cost of sales, as a percent of sales for Company-operated restaurants driven by the same factors as described above for “Cost of Sales, as a Percent of Sales,” (3) higher general and administrative expense and (4) higher franchise support and other costs.

These changes were partially offset by a decrease in the Company’s funding of incremental advertising.

Wendy’s International

Second Quarter Six Months

Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

5 unchanged sentences

Segment profit $ 11.1 $ 11.0 $ 0.1 $ 33.7 $ 32.4 $ 1.3

The increase in Wendy’s International revenues during the second quarter and the first six months of 2025 was primarily due to net new restaurant development.

The increase in Wendy’s International segment profit during the second quarter and the first six months of 2025 was primarily due to higher revenues.

During the first six months of 2025, this increase was partially offset by higher advertising fund expenses.

The increase in Wendy’s International revenues during the third quarter and the first nine months of 2025 was primarily due to (1) net new restaurant development and (2) an increase in franchise same-restaurant sales.

Franchise same-restaurant sales increased during the third quarter and the first nine months of 2025 due to (1) higher average check and (2) an increase in traffic.

The increase in Wendy’s International segment profit during the first nine months of 2025 was primarily due to higher revenues.

This increase was partially offset by (1) higher advertising fund expense and (2) higher general and administrative expense.

Global Real Estate & Development

Second Quarter Six Months

Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

3 unchanged sentences

Segment profit $ 27.6 $ 27.2 $ 0.4 $ 79.5 $ 79.5 $ —

The decrease in Global Real Estate & Development revenues during the second quarter and the first six months of 2025 was primarily due to lower development-related fees.

The decrease in Global Real Estate & Development segment profit during the second quarter and the first six months of 2025 was primarily due to lower revenues.

During the first six months of 2025, this decrease was partially offset by lower franchise rental expense driven by the same factors as described above for “Franchise Rental Expense.”

The decrease in Global Real Estate & Development revenues during the third quarter and the first nine months of 2025 was primarily due to (1) the impact of assigning certain existing leases to franchisees and (2) lower development-related fees.

The increase in Global Real Estate & Development segment profit during the third quarter of 2025 was primarily due to a decrease in franchise rental expense, driven by the same factors as described above for “Franchise Rental Expense.” This change was partially offset by lower revenues.

Liquidity and Capital Resources

As of June 29, 2025, cash, cash equivalents and restricted cash totaled $330.1 million.

As of September 28, 2025, cash, cash equivalents and restricted cash totaled $352.0 million.

In addition, the Company maintains a revolving financing facility, which allows for the drawing of up to $300.0 million.

4 unchanged sentences

In January 2023, our Board of Directors authorized a repurchase program for up to $500.0 million of our common stock through February 28, 2027, when and if market conditions warrant and to the extent legally permissible (the “January 2023 Authorization”).

During the six months ended June 29, 2025, the Company repurchased 13.0 million shares under the January 2023 Authorization with an aggregate purchase price of $186.0 million, of which $0.2 million was accrued as of June 29, 2025, and excluding excise tax of $1.8 million and commissions of $0.2 million.

As of June 29, 2025, the Company had $49.0 million of availability remaining under the January 2023 Authorization.

Subsequent to June 29, 2025 through August 1, 2025, the Company repurchased 0.8 million shares under the January 2023 Authorization with an aggregate purchase price of $8.8 million, excluding applicable excise tax and commissions.

On March 17, 2025 and June 16, 2025, the Company paid quarterly cash dividends per share of $.25 and $.14, respectively, aggregating $76.2 million.

On August 8, 2025, the Company announced a dividend of $.14 per share to be paid on September 16, 2025 to stockholders of record as of September 2, 2025.

If the Company pays regular quarterly cash dividends for the remainder of 2025 at the same rate as declared in the third quarter of 2025, the Company’s total cash requirement for dividends for the remainder of 2025 would be approximately $53.4 million based on the number of shares of its common stock outstanding at August 1, 2025.

During the nine months ended September 28, 2025, the Company repurchased 14.4 million shares under the January 2023 Authorization with an aggregate purchase price of $200.0 million, excluding excise tax of $1.9 million and commissions of $0.2 million.

As of September 28, 2025, the Company had $35.0 million of availability remaining under the January 2023 Authorization.

On March 17, 2025, June 16, 2025, and September 16, 2025, the Company paid quarterly cash dividends per share of $.25 $.14, and $.14, respectively, aggregating $103.0 million.

On November 7, 2025, the Company announced a dividend of $.14 per share to be paid on December 15, 2025 to stockholders of record as of December 1, 2025.

As a result, the Company expects that its total cash requirement for the fourth quarter of 2025 will be approximately $26.6 million based on the number of shares of its common stock outstanding at October 30, 2025.

The Company currently intends to continue to declare and pay quarterly cash dividends;

4 unchanged sentences

During the three months ended June 29, 2025, the Company borrowed an additional $8.5 million under the revolving line of credit.

As a result, as of June 29, 2025, the Company had outstanding borrowings of $15.0 million under the revolving line of credit.

There were no new borrowings or repayments under the revolving line of credit during the three months ended September 28, 2025.

As a result, as of September 28, 2025, the Company had outstanding borrowings of $15.0 million under the revolving line of credit.

Except as described above, there were no material changes to the Company’s debt obligations since December 29, 2024.

The Company was in compliance with its debt covenants as of June 29, 2025.

The Company was in compliance with its debt covenants as of September 28, 2025.

See Note 5 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information related to our long-term debt obligations.

Cash Flows from Operating, Investing and Financing Activities

The table below summarizes our cash flows from operating, investing and financing activities for the first six months of 2025 and 2024:

The table below summarizes our cash flows from operating, investing and financing activities for the first nine months of 2025 and 2024:

2025 2024 Change

7 unchanged sentences

Cash provided by operating activities consists primarily of net income, adjusted for non-cash expenses such as depreciation and amortization, deferred income tax and share-based compensation, and the net change in operating assets and liabilities.

Cash provided by operating activities was $146.0 million and $145.5 million in the first six months of 2025 and 2024, respectively.

The change was primarily due to an increase in net income, adjusted for non-cash expenses.

Cash provided by operating activities was $275.3 million and $286.7 million in the first nine months of 2025 and 2024, respectively.

The change was primarily due to (1) an increase in cash paid for cloud computing arrangements and (2) the timing of payments for marketing expenses of the national advertising funds.

Investing Activities

Cash used in investing activities was $52.3 million and $44.0 million in the first six months of 2025 and 2024, respectively.

The change was primarily due to (1) an increase in expenditures associated with the Company’s franchise development fund of $5.0 million and (2) an increase in capital expenditures of $4.6 million.

Cash used in investing activities was $100.6 million and $68.8 million in the first nine months of 2025 and 2024, respectively.

The change was primarily due to (1) an increase in payments for acquisitions of $16.9 million compared to the prior year, reflecting the impact of the Company’s acquisition of 35 franchise-operated restaurants during the third quarter of 2025 and (2) an increase in capital expenditures of $11.7 million.

Financing Activities

Cash used in financing activities was $272.7 million and $162.4 million in the first six months of 2025 and 2024, respectively.

Cash used in financing activities was $329.6 million and $250.6 million in the first nine months of 2025 and 2024, respectively.

The change was primarily due to an increase in repurchases of the Company’s common stock of $140.7 million.

2 unchanged sentences

General Inflation, Commodities and Changing Prices

Inflationary pressures on labor directly impacted our consolidated results of operations during the six months ended June 29, 2025, and we anticipate continued labor inflation throughout the remainder of 2025.

Inflationary pressures on labor and commodity price increases directly impacted our consolidated results of operations during the nine months ended September 28, 2025, and we anticipate continued labor and commodity inflation throughout the remainder of 2025.

We attempt to manage any inflationary costs and commodity price increases through selective menu price increases, product mix and focused execution of operational excellence.

Delays in implementing such menu price increases and competitive pressures may limit our ability to recover such cost increases in the future.

Inherent volatility experienced in certain commodity markets, such as those for beef, chicken, eggs, pork, cheese and grains, could have a significant effect on our results of operations and may have an adverse effect on us in the future.

Inherent volatility experienced in

certain commodity markets, such as those for beef, chicken, eggs, pork, cheese and grains, could have a significant effect on our results of operations and may have an adverse effect on us in the future.

The extent of any impact will depend on our ability to manage such volatility through product mix and selective menu price increases.

3 unchanged sentences

Quantitative and Qualitative Disclosures about Market Risk.

As of June 29, 2025 there were no material changes from the information contained in the Company’s Form 10-K for the fiscal year ended December 29, 2024.

As of September 28, 2025 there were no material changes from the information contained in the Company’s Form 10-K for the fiscal year ended December 29, 2024.

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 2. Management’s Discussion and Analysis