What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-07 · 147 added, 179 removed, 235 unchanged (58% 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 28, 2025 (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.

There have been no material changes as of March 29, 2026 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 38 foreign countries and U.S.

territories as of September 28, 2025.

territories as of March 29, 2026.

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.

Wendy’s menu also includes chicken nuggets, chili, french fries, baked potatoes, freshly prepared salads, soft drinks, Frosty ® desserts and kids’ meals.

Wendy’s menu also includes chicken tenders and nuggets, chili, french fries, baked potatoes, salads, soft drinks, Frosty ® desserts and kids’ meals.

In addition, Wendy’s restaurants sell a variety of promotional products on a limited time basis.

Wendy’s also offers breakfast across the U.S.

system and in Canada.

Wendy’s also offers breakfast in the U.S.

Wendy’s breakfast menu features a variety of breakfast sandwiches such as the Breakfast Baconator ® and sides such as seasoned potatoes.

10 unchanged sentences

The Company measures segment profit using segment adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”).

Segment adjusted EBITDA excludes certain unallocated general and administrative expenses and other items that vary from period to period without correlation to

the Company’s core operating performance.

Segment adjusted EBITDA excludes certain unallocated general and administrative expenses and other items that vary from period to period without correlation to the Company’s core operating performance.

See “Results of Operations” below and Note 17 to the Condensed Consolidated Financial Statements contained in Item 1 herein for segment financial information.

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

Executive Overview

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.

As of March 29, 2026, the Wendy’s restaurant system was comprised of 7,251 restaurants, with 5,805 Wendy’s restaurants in operation in the U.S.

restaurants, 420 were operated by the Company and 5,385 were operated by a total of 205 franchisees.

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

In addition, at March 29, 2026, there were 1,446 Wendy’s restaurants in operation in 38 foreign countries and U.S.

Of the international restaurants, 1,435 were operated by a total of 116 franchisees and 11 were operated by the Company in the United Kingdom (the “U.K.”).

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(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 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.

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

During 2025, the Company 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.

These pillars are designed to drive profitable average unit volume growth and increase traffic in the U.S.

by improving marketing effectiveness, menu offerings and the customer experience, and to enhance franchisee economics.

Internationally, the Company’s strategic priorities also include sustaining strong net unit growth and driving profitable average unit volume growth.

On May 8, 2026, the Company announced its entry into a franchise agreement to build up to 1,000 Wendy’s restaurants across China over the next 10 years with a large restaurant operator with decades of experience in China.

Key Business Measures

11 unchanged sentences

Franchised restaurants’ sales are reported by our franchisees and represent their revenues from sales at franchised Wendy’s restaurants.

The Company’s consolidated financial statements do not include sales by franchised restaurants to their customers.

The Company’s royalty and advertising funds revenues are computed as percentages of

sales made by Wendy’s franchisees.

The Company’s condensed consolidated financial statements do not include sales by

franchised restaurants to their customers.

The Company’s royalty and advertising funds revenues are computed as percentages of sales made by Wendy’s franchisees.

As a result, sales by Wendy’s franchisees have a direct effect on the Company’s royalty and advertising funds revenues and profitability.

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The Company believes its presentation of same-restaurant sales, Company-operated restaurant margin and systemwide sales provide a meaningful perspective of the underlying operating performance of the Company’s current business and enables investors to better understand and evaluate the Company’s historical and prospective operating performance.

The Company believes that these metrics are important supplemental measures of operating performance because they highlight trends in the Company’s business that may not otherwise be apparent when relying solely on GAAP financial measures.

The Company believes investors, analysts and other interested parties use these metrics in evaluating issuers and that the presentation of these measures facilitates a comparative assessment of the Company’s operating performance.

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.

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 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 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 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;

First Quarter Highlights

• Global systemwide sales were $3.22 billion in the first quarter of 2026 compared with $3.39 billion in the first quarter of 2025, a decrease of 5.5% on a constant currency basis;

• International systemwide sales were $518.0 million in the first quarter of 2026 compared with $473.2 million in the first quarter of 2025, an increase of 6.0% on a constant currency basis;

• Revenues increased 3.3% to $540.6 million in the first quarter of 2026 compared with $523.5 million in the first quarter of 2025;

• Global same-restaurant sales decreased 6.8%, U.S.

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 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.

same-restaurant sales decreased 7.8% and international same-restaurant sales decreased 0.4% compared with the first quarter of 2025;

• Global Company-operated restaurant margin was 10.8% in the first quarter of 2026, a decrease of 350 basis points compared with the first quarter of 2025;

• Income before income taxes decreased 37.8% to $34.2 million in the first quarter of 2026 compared with $54.9 million in the first quarter of 2025;

• Digital sales increased to approximately 23.6% of global systemwide sales in the first quarter of 2026 compared with approximately 20.3% in the first quarter of 2025;

• Systemwide restaurant count decreased by 146 net restaurants in the first quarter of 2026.

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 third quarter and first nine months of 2025 and 2024.

Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

The tables included throughout this Results of Operations section set forth in millions the Company’s condensed consolidated results of operations for the first quarter of 2026 and 2025.

First Quarter

2026 2025 Change

Sales $ 225.5 $ 219.5 $ 6.0

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Amortization of cloud computing arrangements 4.8 4.2 0.6

System optimization gains, net — (0.4) 0.4 (0.3) (0.6) 0.3

System optimization (gains) losses, net (1.6) 0.1 (1.7)

Reorganization and realignment costs (0.2) (0.7) 0.5

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Net income $ 22.7 $ 39.2 $ (16.5)

Third Quarter Nine Months

Total Revenues 2024 % of

Total Revenues 2025 % of

First Quarter

Total Revenues 2025 % of

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$ 540.6 100.0 % $ 523.5 100.0 %

Third Quarter Nine Months

Sales 2024 % of

Sales 2025 % of

First Quarter

Sales 2025 % of

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Total cost of sales $ 201.0 89.2 % $ 188.2 85.7 %

Third Quarter Nine Months

Sales 2024 % of

Sales 2025 % of

First Quarter

Sales 2025 % of

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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.

Third Quarter Nine Months

2025 2024 2025 2024

First Quarter

Key business measures:

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

(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 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.

Third Quarter

(b) During the first quarter of 2026 and 2025, global systemwide sales decreased 5.5% and 1.1%, respectively, U.S.

systemwide sales decreased 7.3% and 2.6%, respectively, and international systemwide sales increased 6.0% and 8.9%, respectively, on a constant currency basis.

First Quarter

Company-operated U.S.

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Restaurant count:

Restaurant count at June 29, 2025

387 5,580 13 1,354 7,334

Opened 4 19 1 30 54

Closed (2) (9) — (14) (25)

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

Restaurant count at September 28, 2025

421 5,558 14 1,370 7,363

Company-operated U.S.

Franchised International Company-operated International Franchised Systemwide

Restaurant count at December 28, 2025

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Closed (3) (184) — (9) (196)

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

Restaurant count at September 28, 2025

Net (sold to) purchased by franchisees (3) 3 — — —

Restaurant count at March 29, 2026

420 5,385 11 1,435 7,251

Sales Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Sales First Quarter

2026 2025 Change

Sales $ 225.5 $ 219.5 $ 6.0

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 Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

The increase in sales during the first quarter of 2026 was primarily due to (1) the Company’s acquisition of franchise-operated restaurants during the third quarter of 2025 of $13.6 million and (2) net new restaurant development of $3.1 million.

These impacts were partially offset by (1) a 4.8% decrease in global Company-operated same-restaurant sales of $9.4 million and (2) the sale of Company-operated restaurants to franchisees of $2.1 million.

Company-operated same-restaurant sales during the first quarter of 2026 decreased due to a decrease in traffic, partially offset by higher average check.

Franchise Royalty Revenue and Fees First Quarter

2026 2025 Change

Franchise royalty revenue $ 116.2 $ 121.7 $ (5.5)

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$ 147.9 $ 145.1 $ 2.8

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 royalty revenue during the first quarter of 2026 decreased primarily due to a 7.0% decrease in global franchise same-restaurant sales of $8.1 million, partially offset by net new restaurant development of $0.7 million.

Franchise same-restaurant sales during the first quarter of 2026 decreased due to a decrease in traffic, partially offset by higher average check.

The increase in franchise fees during the first quarter of 2026 was primarily due to the impact of system optimization related to hours of operation flexibility and restaurant closures.

Franchise Rental Income First Quarter

2026 2025 Change

Franchise rental income $ 58.9 $ 58.5 $ 0.4

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

The increase in franchise rental income during the first quarter of 2026 was primarily due to entering into new leases.

Advertising Funds Revenue First Quarter

2026 2025 Change

Advertising funds revenue $ 108.3 $ 100.4 $ 7.9

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

The increase in advertising funds revenue during the first quarter of 2026 was primarily due to local and regional advertising funds being reallocated to U.S.

national advertising of approximately $15.0 million, partially offset by a decrease in franchise same-restaurant sales of $7.1 million.

Cost of Sales, as a Percent of Sales First Quarter

2026 2025 Change

Food and paper 31.3 % 30.8 % 0.5 %

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89.2 % 85.7 % 3.5 %

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.

The increase in cost of sales, as a percent of sales, during the first quarter of 2026 was primarily due to (1) a decrease in traffic, (2) higher commodity costs 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 First Quarter

2026 2025 Change

Franchise support and other costs $ 22.0 $ 16.6 $ 5.4

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

The increase in franchise support and other costs during the first quarter of 2026 was primarily due to an increase in the provision for doubtful accounts.

Franchise Rental Expense First Quarter

2026 2025 Change

Franchise rental expense $ 30.2 $ 30.7 $ (0.5)

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

The decrease in franchise rental expense during the first quarter of 2026 was primarily due to the impact of amending certain existing leases.

Advertising Funds Expense First Quarter

2026 2025 Change

Advertising funds expense $ 108.6 $ 101.5 $ 7.1

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

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

The increase in advertising funds expense during the first quarter of 2026 was primarily due to the same factors as described above for “Advertising Funds Revenue.”

General and Administrative First Quarter

2026 2025 Change

Employee compensation and benefits $ 40.4 $ 38.5 $ 1.9

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 15.6 14.1 1.5

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$ 72.8 $ 68.2 $ 4.6

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

The increase in general and administrative expenses during the first quarter of 2026 was primarily due to (1) higher employee compensation and benefits and (2) an increase in professional fees.

Depreciation and Amortization (exclusive of amortization of cloud computing arrangements shown separately below) First Quarter

2026 2025 Change

Restaurants $ 20.9 $ 17.7 $ 3.2

Finance lease assets 5.8 5.1 0.7

Technology support, corporate and other 13.9 13.7 0.2

$ 40.6 $ 36.5 $ 4.1

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

The increase in depreciation and amortization during the first quarter of 2026 was primarily due to (1) depreciation and amortization on restaurant assets acquired from a franchisee during the third quarter of 2025, (2) asset additions for new and remodeled restaurants and (3) restaurant-related asset disposals.

Amortization of Cloud Computing Arrangements First Quarter

2026 2025 Change

Amortization of cloud computing arrangements $ 4.8 $ 4.2 $ 0.6

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

The increase in amortization of cloud computing arrangements during the first quarter of 2026 was primarily due to amortization of assets associated with the Company’s digital investments.

System Optimization (Gains) Losses, Net First Quarter

2026 2025 Change

System optimization (gains) losses, net $ (1.6) $ 0.1 $ (1.7)

System optimization (gains) losses, net during the first quarter of 2026 were primarily comprised of gains on the sale of surplus and other properties.

See Note 10 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further discussion.

Reorganization and Realignment Costs First Quarter

2026 2025 Change

Organizational Redesign Plan $ (0.2) $ (1.0) $ 0.8

1 unchanged sentence

$ (0.2) $ (0.7) $ 0.5

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.

During the first quarter of 2026 and 2025, the Company recognized costs under the Organizational Redesign Plan of $(0.2) million and $(1.0) million, respectively, which primarily included reversals of severance accruals resulting from changes in estimates.

See Note 11 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information on the Organizational Redesign Plan.

Impairment of Long-Lived Assets Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

Impairment of Long-Lived Assets First Quarter

2026 2025 Change

Impairment of long-lived assets $ 2.6 $ 1.4 $ 1.2

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

The increase in impairment of long-lived assets during the first quarter of 2026 was primarily due to losses from the remeasurement to fair value of assets leased and/or subleased to franchisees in connection with the closure of franchise-operated restaurants.

Other Operating Income, Net First Quarter

2026 2025 Change

Claim settlement $ — $ 4.0 $ (4.0)

Lease buyout 3.9 1.7 2.2 4.0 2.2 1.8

Gains on sales-type leases 1.9 — 1.9

Other, net 3.2 2.3 0.9

$ 5.1 $ 6.3 $ (1.2)

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

The decrease in other operating income, net during the first quarter of 2026 was primarily due to the settlement of a claim in the first quarter of 2025.

This decrease was partially offset by gains on new and modified sales-type leases.

Interest Expense, Net First Quarter

2026 2025 Change

Interest expense, net $ 34.1 $ 31.5 $ 2.6

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

The increase in interest expense, net during the first quarter of 2026 was primarily due to the impact of completing the refinancing of a portion of the Company’s securitized financing facility in the fourth quarter of 2025.

Investment Loss, Net First Quarter

2026 2025 Change

Investment loss, net $ — $ 1.7 $ (1.7)

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

During the first quarter 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 First Quarter

2026 2025 Change

Other income, net $ 3.4 $ 5.0 $ (1.6)

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

The decrease in other income, net during the first quarter of 2026 was primarily due to a decrease in interest income, reflecting lower balances of cash equivalents and lower interest rates.

Provision for Income Taxes First Quarter

2026 2025 Change

Income before income taxes $ 34.2 $ 54.9 $ (20.7)

3 unchanged sentences

33.5 % 28.6 % 4.9 %

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.

The effective tax rates for the first quarter of 2026 and 2025 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 first quarter of 2026 was primarily due to lower income before income taxes and the tax effects of share-based compensation.

Segment Information

See Note 17 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information regarding the Company’s segments.

Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

First Quarter

2026 2025 Change

Sales $ 219.3 $ 212.7 $ 6.6

4 unchanged sentences

Segment profit $ 109.9 $ 121.0 $ (11.1)

The decrease in Wendy’s U.S.

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 increase in Wendy’s U.S.

revenues during the first quarter of 2026 was primarily due to (1) the Company’s acquisition of 35 franchise-operated restaurants in the third quarter of 2025, (2) an increase in franchise fees, (3) higher advertising fund revenue and (4) net new restaurant development.

These impacts were partially offset by a decrease in same-restaurant sales.

Same-restaurant sales decreased during the first quarter of 2026 primarily due to a decrease in traffic, partially offset by higher average check.

The decrease in Wendy’s U.S.

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.

segment profit during the first quarter of 2026 was primarily due to (1) 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,” and (2) higher franchise support and other costs.

These changes were partially offset by higher revenues.

Wendy’s International

Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

First Quarter

2026 2025 Change

Sales $ 6.2 $ 6.8 $ (0.6)

4 unchanged sentences

Segment profit $ 10.6 $ 9.4 $ 1.2

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.

The increase in Wendy’s International revenues during the first quarter of 2026 was primarily due to net new restaurant development.

The increase in Wendy’s International segment profit during the first quarter of 2026 was primarily due to higher revenues, partially offset by higher general and administrative expenses.

Global Real Estate & Development

Third Quarter Nine Months

2025 2024 Change 2025 2024 Change

First Quarter

2026 2025 Change

Franchise fees $ 0.6 $ 0.6 $ —

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Segment profit $ 28.1 $ 24.7 $ 3.4

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.

The increase in Global Real Estate & Development revenues during the first quarter of 2026 was primarily due to an increase in franchise rental income, driven by the same factors as described above for “Franchise Rental Income.”

The increase in Global Real Estate & Development segment profit during the first quarter of 2026 was primarily due to (1) gains on new and modified sales-type leases, (2) the impact of amending certain existing leases and (3) entering into new leases.

Liquidity and Capital Resources

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

As of March 29, 2026, cash, cash equivalents and restricted cash totaled $362.0 million.

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

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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 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.

During the three months ended March 29, 2026, no shares were repurchased under the January 2023 Authorization.

As of March 29, 2026, the Company had $35.0 million of availability remaining under the January 2023 Authorization.

On March 16, 2026, the Company paid a quarterly cash dividend per share of $.14, aggregating $26.6 million.

On May 8, 2026, the Company announced a dividend of $.14 per share to be paid on June 15, 2026 to stockholders of record as of June 1, 2026.

If the Company pays regular quarterly cash dividends for the remainder of 2026 at the same rate declared in the second quarter of 2026, the Company’s total cash requirement for dividends for the remainder of 2026 will be approximately $80.0 million based on the number of shares of its common stock outstanding at May 1, 2026.

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

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advertising fund has a revolving line of credit of $15.0 million, which was established to support the Company’s advertising fund operations.

During the three months ended March 30, 2025, the Company borrowed and repaid $15.0 million and $8.5 million, respectively, under the revolving line of credit.

During the three months ended June 29, 2025, the Company borrowed an additional $8.5 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.

During the three months ended March 29, 2026, the Company borrowed and repaid $11.5 million under the revolving line of credit, then subsequently borrowed and repaid $3.6 million under the revolving line of credit.

As a result, as of March 29, 2026, the Company had no outstanding borrowings under the revolving line of credit.

Except as described above, there were no material changes to the Company’s debt obligations since December 28, 2025.

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

The Company was in compliance with its debt covenants as of March 29, 2026.

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 nine months of 2025 and 2024:

The table below summarizes our cash flows from operating, investing and financing activities for the first three months of 2026 and 2025:

First Quarter

2026 2025 Change

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Effect of exchange rate changes on cash (0.8) 0.8 (1.6)

Net decrease in cash, cash equivalents and restricted cash $ (151.6) $ (34.3) $ (117.3)

Net increase (decrease) in cash, cash equivalents and restricted cash $ 4.4 $ (114.6) $ 119.0

Operating Activities

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 $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.

Cash provided by operating activities was $59.4 million and $85.4 million in the first three months of 2026 and 2025, respectively.

The change was primarily due to (1) the timing of receipt of vendor incentives, (2) the timing of the collection of royalty receivables and (3) lower net income, adjusted for non-cash expenses.

These changes were partially offset by the timing of payments for marketing expenses of the national advertising funds.

Investing Activities

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.

Cash used in investing activities was $13.7 million and $21.5 million in the first three months of 2026 and 2025, respectively.

The change was primarily due to (1) a decrease in capital expenditures of $5.8 million and (2) an increase in proceeds from dispositions of $2.7 million.

Financing Activities

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.

This change was partially offset by (1) a decrease in dividends of $50.5 million and (2) a net increase in cash provided by long-term debt activities of $15.0 million, reflecting the impact of the draw on the Company’s U.S.

Cash used in financing activities was $40.5 million and $179.3 million in the first three months of 2026 and 2025, respectively.

The change was primarily due to (1) a decrease in repurchases of the Company’s common stock of $122.8 million and (2) a decrease in dividends of $22.8 million.

These changes were partially offset by an increase in repayments of long-term debt of $6.7 million, reflecting the impact of repayments on the Company’s U.S.

advertising fund revolving line of credit.

General Inflation, Commodities and Changing Prices

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.

Inflationary pressures on labor and commodity price increases directly impacted our consolidated results of operations during the three months ended March 29, 2026, and we anticipate continued labor and commodity inflation throughout the remainder of 2026.

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.

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

Inherent volatility experienced in certain commodity markets, such as those for beef, chicken, eggs, pork, dairy 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 selective menu price increases, product mix and focused execution of operational excellence.

Wendy’s restaurant operations are moderately seasonal.

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Quantitative and Qualitative Disclosures about Market Risk.

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.

As of March 29, 2026 there were no material changes from the information contained in the Company’s Form 10-K for the fiscal year ended December 28, 2025.

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