Wendy's Co 10-Q

Item 1. Financial Statements. THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands Except Par Value) March 29, 2026 December 28, 2025 ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 298,740 $ 300,833 Restricted cash 39,295 39,207 Accounts and notes receivable, net 125,055 117,333 Inventories 6,604 7,387 Prepaid expenses and other current assets 73,419 55,412 Advertising funds restricted assets 109,149 97,867 Total current assets 652,262 618,039 Properties 908,478 937,795 Finance lease assets 325,538 312,844 Operating lease assets 611,376 642,589 Goodwill 773,710 774,088 Other intangible assets 1,158,395 1,170,671 Investments 24,499 25,227 Net investment in sales-type and direct financing leases 279,671 284,891 Other assets 190,693 190,417 Total assets $ 4,924,622 $ 4,956,561 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 29,750 $ 29,750 Current portion of finance lease liabilities 27,334 26,673 Current portion of operating lease liabilities 52,318 51,119 Accounts payable 23,596 30,450 Accrued expenses and other current liabilities 114,812 116,655 Advertising funds restricted liabilities 108,348 96,454 Total current liabilities 356,158 351,101 Long-term debt 2,724,896 2,730,502 Long-term finance lease liabilities 655,082 646,715 Long-term operating lease liabilities 627,213 660,257 Deferred income taxes 288,492 287,753 Deferred franchise fees 84,426 87,956 Other liabilities 72,804 74,894 Total liabilities 4,809,071 4,839,178 Commitments and contingencies Stockholders’ equity: Common stock, $ 0.10 par value; 1,500,000 shares authorized; 470,424 shares issued; 190,450 and 190,324 shares outstanding, respectively 47,042 47,042 Additional paid-in capital 2,989,355 2,986,150 Retained earnings 431,173 435,124 Common stock held in treasury, at cost; 279,974 and 280,100 shares, respectively ( 3,285,255 ) ( 3,286,965 ) Accumulated other comprehensive loss ( 66,764 ) ( 63,968 ) Total stockholders’ equity 115,551 117,383 Total liabilities and stockholders’ equity $ 4,924,622 $ 4,956,561 See accompanying notes to condensed consolidated financial statements. 4 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands Except Per Share Amounts) Three Months Ended March 29, 2026 March 30, 2025 (Unaudited) Revenues: Sales $ 225,497 $ 219,510 Franchise royalty revenue and fees 147,895 145,148 Franchise rental income 58,904 58,454 Advertising funds revenue 108,341 100,360 540,637 523,472 Costs and expenses: Cost of sales 201,049 188,169 Franchise support and other costs 21,991 16,596 Franchise rental expense 30,176 30,701 Advertising funds expense 108,615 101,528 General and administrative 72,843 68,204 Depreciation and amortization (exclusive of amortization of cloud computing arrangements shown separately below) 40,575 36,549 Amortization of cloud computing arrangements 4,762 4,167 System optimization (gains) losses, net ( 1,625 ) 90 Reorganization and realignment costs ( 162 ) ( 692 ) Impairment of long-lived assets 2,572 1,421 Other operating income, net ( 5,080 ) ( 6,387 ) 475,716 440,346 Operating profit 64,921 83,126 Interest expense, net ( 34,106 ) ( 31,477 ) Investment loss, net — ( 1,718 ) Other income, net 3,350 4,986 Income before income taxes 34,165 54,917 Provision for income taxes ( 11,453 ) ( 15,685 ) Net income $ 22,712 $ 39,232 Net income per share: Basic $ .12 $ .20 Diluted $ .12 $ .19 See accompanying notes to condensed consolidated financial statements. 5 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands) Three Months Ended March 29, 2026 March 30, 2025 (Unaudited) Net income $ 22,712 $ 39,232 Other comprehensive (loss) income: Foreign currency translation adjustment ( 2,796 ) 1,912 Other comprehensive (loss) income ( 2,796 ) 1,912 Comprehensive income $ 19,916 $ 41,144 See accompanying notes to condensed consolidated financial statements. 6 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In Thousands) Common Stock Additional Paid-In Capital Retained Earnings Common Stock Held in Treasury Accumulated Other Comprehensive Loss Total (Unaudited) Balance at December 28, 2025 $ 47,042 $ 2,986,150 $ 435,124 $ ( 3,286,965 ) $ ( 63,968 ) $ 117,383 Net income — — 22,712 — — 22,712 Other comprehensive loss — — — — ( 2,796 ) ( 2,796 ) Cash dividends — — ( 26,648 ) — — ( 26,648 ) Share-based compensation — 5,246 — — — 5,246 Common stock issued upon vesting of restricted shares — ( 2,006 ) — 1,583 — ( 423 ) Other — ( 35 ) ( 15 ) 127 — 77 Balance at March 29, 2026 $ 47,042 $ 2,989,355 $ 431,173 $ ( 3,285,255 ) $ ( 66,764 ) $ 115,551 Balance at December 29, 2024 $ 47,042 $ 2,982,102 $ 399,700 $ ( 3,094,739 ) $ ( 74,753 ) $ 259,352 Net income — — 39,232 — — 39,232 Other comprehensive income — — — — 1,912 1,912 Cash dividends — — ( 49,432 ) — — ( 49,432 ) Repurchases of common stock — — — ( 125,399 ) — ( 125,399 ) Share-based compensation — 5,572 — — — 5,572 Common stock issued upon exercises of stock options — ( 130 ) — 326 — 196 Common stock issued upon vesting of restricted shares — ( 2,702 ) — 1,453 — ( 1,249 ) Other — 23 ( 19 ) 51 — 55 Balance at March 30, 2025 $ 47,042 $ 2,984,865 $ 389,481 $ ( 3,218,308 ) $ ( 72,841 ) $ 130,239 See accompanying notes to condensed consolidated financial statements. 7 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) Three Months Ended March 29, 2026 March 30, 2025 (Unaudited) Cash flows from operating activities: Net income $ 22,712 $ 39,232 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization (exclusive of amortization of cloud computing arrangements shown separately below) 40,575 36,549 Amortization of cloud computing arrangements 4,762 4,167 Share-based compensation 5,246 5,572 Impairment of long-lived assets 2,572 1,421 Deferred income tax 956 306 Non-cash rental expense, net 10,925 10,350 Change in operating lease liabilities ( 12,584 ) ( 12,131 ) Net (recognition) receipt of deferred vendor incentives ( 2,535 ) 11,178 System optimization (gains) losses, net ( 1,625 ) 90 Distributions received from joint ventures, net of equity in earnings 341 717 Long-term debt-related activities, net 1,832 1,873 Cloud computing arrangements expenditures ( 4,157 ) ( 2,417 ) Changes in operating assets and liabilities and other, net ( 9,631 ) ( 11,492 ) Net cash provided by operating activities 59,389 85,415 Cash flows from investing activities: Capital expenditures ( 11,881 ) ( 17,679 ) Franchise development fund ( 4,580 ) ( 5,813 ) Dispositions 2,796 55 Notes receivable, net — 1,949 Net cash used in investing activities ( 13,665 ) ( 21,488 ) Cash flows from financing activities: Proceeds from long-term debt 15,100 15,000 Repayments of long-term debt ( 22,538 ) ( 15,813 ) Repayments of finance lease liabilities ( 5,970 ) ( 5,238 ) Repurchases of common stock — ( 122,784 ) Dividends ( 26,648 ) ( 49,432 ) Proceeds from stock option exercises — 273 Payments related to tax withholding for share-based compensation ( 423 ) ( 1,326 ) Net cash used in financing activities ( 40,479 ) ( 179,320 ) Net cash provided by (used in) operations before effect of exchange rate changes on cash 5,245 ( 115,393 ) Effect of exchange rate changes on cash ( 886 ) 744 Net increase (decrease) in cash, cash equivalents and restricted cash 4,359 ( 114,649 ) Cash, cash equivalents and restricted cash at beginning of period 357,672 503,608 Cash, cash equivalents and restricted cash at end of period $ 362,031 $ 388,959 See accompanying notes to condensed consolidated financial statements. 8 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (1) Basis of Presentation 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 March 29, 2026, the results of our operations for the three months ended March 29, 2026 and March 30, 2025 and cash flows for the three months ended March 29, 2026 and March 30, 2025. The results of operations for the three months ended March 29, 2026 are not necessarily indicative of the results to be expected for the full 2026 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 28, 2025 (the “Form 10-K”). The principal 100% owned subsidiary of the Company is Wendy’s International, LLC and its subsidiaries (“Wendy’s”). The Company manages and internally reports its business in the following segments: (1) Wendy’s U.S., (2) Wendy’s International and (3) Global Real Estate & Development. See Note 17 for further information. We report on a fiscal year consisting of 52 or 53 weeks ending on the Sunday closest to or on December 31. All three-month periods presented herein contain 13 weeks. All references to years, quarters and months relate to fiscal periods rather than calendar periods. Our significant interim accounting policies include the recognition of advertising funds expense in proportion to advertising funds revenue. (2) Revenue Disaggregation of Revenue The following tables disaggregate revenue by segment and source: Wendy’s U.S. Wendy’s International Global Real Estate & Development Total Three Months Ended March 29, 2026 Sales at Company-operated restaurants $ 219,295 $ 6,202 $ — $ 225,497 Franchise royalty revenue 97,308 18,882 — 116,190 Franchise fees 28,283 2,775 647 31,705 Franchise rental income — — 58,904 58,904 Advertising funds revenue 99,273 9,068 — 108,341 Total revenues $ 444,159 $ 36,927 $ 59,551 $ 540,637 Three Months Ended March 30, 2025 Sales at Company-operated restaurants $ 212,744 $ 6,766 $ — $ 219,510 Franchise royalty revenue 104,406 17,269 — 121,675 Franchise fees 20,704 2,086 683 23,473 Franchise rental income — — 58,454 58,454 Advertising funds revenue 91,760 8,600 — 100,360 Total revenues $ 429,614 $ 34,721 $ 59,137 $ 523,472 9 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Contract Balances The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers: March 29, 2026 (a) December 28, 2025 (a) Receivables, which are included in “Accounts and notes receivable, net” (b) $ 71,918 $ 59,060 Receivables, which are included in “Advertising funds restricted assets” 73,825 75,083 Deferred franchise fees (c) 94,185 98,496 _______________ (a) Excludes funds collected from the sale of gift cards, which are primarily reimbursed to franchisees upon redemption at franchised restaurants and do not ultimately result in the recognition of revenue in the Company’s condensed consolidated statements of operations. (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 $ 9,759 and $ 84,426 , respectively, as of March 29, 2026, and $ 10,540 and $ 87,956 , respectively, as of December 28, 2025. Significant changes in deferred franchise fees are as follows: Three Months Ended March 29, 2026 March 30, 2025 Deferred franchise fees at beginning of period $ 98,496 $ 99,411 Revenue recognized during the period ( 4,832 ) ( 2,345 ) New deferrals due to cash received and other 521 1,935 Deferred franchise fees at end of period $ 94,185 $ 99,001 Anticipated Future Recognition of Deferred Franchise Fees The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period: Estimate for fiscal year: 2026 (a) $ 9,759 2027 6,650 2028 6,492 2029 6,386 2030 6,283 Thereafter 58,615 $ 94,185 _______________ (a) Represents franchise fees expected to be recognized for the remainder of 2026, which includes development-related franchise fees expected to be recognized over a duration of one year or less. 10 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (3) Leases 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 29, 2026, the nature of restaurants operated by the Company and its franchisees was as follows: March 29, 2026 Company-operated restaurants: Owned land and building 153 Owned building and held long-term land leases 142 Leased land and building 136 Total Company-operated restaurants 431 Franchisee-operated restaurants: Company-owned properties leased to franchisees 454 Company-leased properties subleased to franchisees 1,122 Other franchisee-operated restaurants 5,244 Total franchisee-operated restaurants 6,820 Total Company-operated and franchisee-operated restaurants 7,251 Company as Lessee The components of lease cost are as follows: Three Months Ended March 29, 2026 March 30, 2025 Finance lease cost: Amortization of finance lease assets $ 5,768 $ 5,145 Interest on finance lease liabilities 11,642 10,877 17,410 16,022 Operating lease cost 20,010 20,517 Variable lease cost (a) 15,909 16,213 Short-term lease cost 1,376 1,266 Total operating lease cost (b) 37,295 37,996 Total lease cost $ 54,705 $ 54,018 _______________ (a) Includes expenses for executory costs of $ 10,539 and $ 10,394 for the three months ended March 29, 2026 and March 30, 2025, respectively, for which the Company is reimbursed by sublessees. (b) Includes $ 30,040 and $ 30,652 for the three months ended March 29, 2026 and March 30, 2025, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $ 6,887 and $ 6,941 for the three months ended March 29, 2026 and March 30, 2025, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants. 11 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Company as Lessor The components of lease income are as follows: Three Months Ended March 29, 2026 March 30, 2025 Sales-type and direct-financing leases: Selling profit $ 1,853 $ ( 11 ) Interest income (a) 6,700 6,915 Operating lease income 42,651 42,421 Variable lease income 16,253 16,033 Franchise rental income (b) $ 58,904 $ 58,454 _______________ (a) Included in “Interest expense, net.” (b) Includes sublease income of $ 42,200 and $ 42,784 recognized during the three months ended March 29, 2026 and March 30, 2025, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $ 10,411 and $ 10,197 for the three months ended March 29, 2026 and March 30, 2025, respectively. (4) Investments Equity Method Investment Wendy’s has a 50 % share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with a subsidiary of Restaurant Brands International Inc., a quick-service restaurant company that owns the Tim Hortons ® brand (Tim Hortons is a registered trademark of Tim Hortons USA Inc.). The Company has significant influence over this investee. 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.” Presented below is activity related to our investment in TimWen included in our condensed consolidated financial statements: Three Months Ended March 29, 2026 March 30, 2025 Balance at beginning of period $ 25,227 $ 27,288 Equity in earnings for the period 2,836 2,843 Amortization of purchase price adjustments (a) ( 473 ) ( 591 ) 2,363 2,252 Distributions received ( 2,704 ) ( 2,969 ) Foreign currency translation adjustment included in “Other comprehensive (loss) income” ( 387 ) 199 Balance at end of period $ 24,499 $ 26,770 _______________ (a) Purchase price adjustments that impacted the carrying value of the Company’s investment in TimWen are being amortized over the average original aggregate life of 21 years. 12 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Other Investments 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 zero as of March 30, 2025. (5) Long-Term Debt Long-term debt consisted of the following: March 29, 2026 December 28, 2025 Class A-2 Notes: 5.422 % Series 2025-1 Class A-2-I Notes, anticipated repayment date 2032 $ 448,875 $ 450,000 4.236 % Series 2022-1 Class A-2-I Notes, anticipated repayment date 2029 96,250 96,500 4.535 % Series 2022-1 Class A-2-II Notes, anticipated repayment date 2032 381,134 382,134 2.370 % Series 2021-1 Class A-2-I Notes, anticipated repayment date 2029 413,144 414,269 2.775 % Series 2021-1 Class A-2-II Notes, anticipated repayment date 2031 618,905 620,530 4.080 % Series 2019-1 Class A-2-II Notes, anticipated repayment date 2029 392,998 394,123 3.884 % Series 2018-1 Class A-2-II Notes, anticipated repayment date 2028 430,412 431,599 Unamortized debt issuance costs ( 27,072 ) ( 28,903 ) 2,754,646 2,760,252 Less amounts payable within one year ( 29,750 ) ( 29,750 ) Total long-term debt $ 2,724,896 $ 2,730,502 Other Long-Term Debt Wendy’s U.S. 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 29, 2026, the Company borrowed and repaid $ 11,500 under the revolving line of credit, then subsequently borrowed and repaid $ 3,600 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. (6) Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques under the accounting guidance related to fair value measurements are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. These inputs are classified into the following hierarchy: • Level 1 Inputs - Quoted prices for identical assets or liabilities in active markets. • Level 2 Inputs - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs - Pricing inputs are unobservable for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value require significant management judgment or estimation. 13 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Financial Instruments The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments: March 29, 2026 December 28, 2025 Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Measurements Financial assets Cash equivalents $ 196,187 $ 196,187 $ 210,607 $ 210,607 Level 1 Financial liabilities (b) Series 2025-1 Class A-2-I Notes 448,875 449,773 450,000 447,075 Level 2 Series 2022-1 Class A-2-I Notes 96,250 93,767 96,500 95,284 Level 2 Series 2022-1 Class A-2-II Notes 381,134 360,400 382,134 371,625 Level 2 Series 2021-1 Class A-2-I Notes 413,144 381,663 414,269 385,726 Level 2 Series 2021-1 Class A-2-II Notes 618,905 546,617 620,530 553,699 Level 2 Series 2019-1 Class A-2-II Notes 392,998 378,182 394,123 383,403 Level 2 Series 2018-1 Class A-2-II Notes 430,412 423,138 431,599 421,630 Level 2 _______________ (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. (b) The fair values were based on quoted market prices in markets that are not considered active markets. The carrying amounts of cash, accounts payable and accrued expenses approximate fair value due to the short-term nature of those items. The carrying amounts of accounts and notes receivable, net (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts. Our cash equivalents are the only financial assets measured and recorded at fair value on a recurring basis. 14 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Non-Recurring Fair Value Measurements Assets and liabilities remeasured to fair value on a non-recurring basis resulted in impairment that we have recorded to “Impairment of long-lived assets” in our condensed consolidated statements of operations. Total impairment losses may reflect the impact of remeasuring long-lived assets held and used (including land, buildings, leasehold improvements, favorable lease assets and right-of-use assets) to fair value as a result of (1) the deterioration in operating performance of certain Company-operated restaurants and (2) the Company’s decision to lease and/or sublease the land and/or buildings to franchisees in connection with the sale or anticipated sale of restaurants, including any subsequent lease modifications. The fair values of long-lived assets held and used presented in the tables below represent the remaining carrying value and were estimated based on either discounted cash flows of future anticipated lease and sublease income or discounted cash flows of future anticipated Company-operated restaurant performance. Total impairment losses may also include the impact of remeasuring long-lived assets held for sale. The fair values of long-lived assets held for sale presented in the tables below represent the remaining carrying value and were estimated based on current market values. See Note 12 for further information on impairment of our long-lived assets. Fair Value Measurements March 29, 2026 Level 1 Level 2 Level 3 Held and used $ 468 $ — $ — $ 468 Held for sale 514 — — 514 Total $ 982 $ — $ — $ 982 Fair Value Measurements December 28, 2025 Level 1 Level 2 Level 3 Held and used $ 1,367 $ — $ — $ 1,367 Held for sale 2,457 — — 2,457 Total $ 3,824 $ — $ — $ 3,824 (7) Income Taxes The Company’s effective tax rate for the three months ended March 29, 2026 and March 30, 2025 was 33.5 % and 28.6 %, respectively. The Company’s effective tax rate varied from the U.S. federal statutory rate of 21 % for the three months ended March 29, 2026 primarily due to state income taxes, share-based compensation and the tax effects of our foreign operations. 15 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (8) Net Income Per Share The calculation of basic and diluted net income per share was as follows: Three Months Ended March 29, 2026 March 30, 2025 Net income $ 22,712 $ 39,232 Common stock: Weighted average basic shares outstanding 190,293 200,643 Dilutive effect of stock options and restricted shares 607 974 Weighted average diluted shares outstanding 190,900 201,617 Net income per share: Basic $ .12 $ .20 Diluted $ .12 $ .19 Basic net income per share for the three months ended March 29, 2026 and March 30, 2025 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 11,926 and 8,288 for the three months ended March 29, 2026, and March 30, 2025, respectively, from our diluted net income per share calculation as they would have had anti-dilutive effects. (9) Stockholders’ Equity Dividends During the first quarter of 2026 and 2025, the Company paid dividends per share of $ .14 and $ .25 , respectively. 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 Authorization”). 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 $ 35,000 of availability remaining under the January 2023 Authorization. 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 . 16 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Accumulated Other Comprehensive Loss The following table provides a rollforward of accumulated other comprehensive loss, which is entirely comprised of foreign currency translation: Three Months Ended March 29, 2026 March 30, 2025 Balance at beginning of period $ ( 63,968 ) $ ( 74,753 ) Foreign currency translation ( 2,796 ) 1,912 Balance at end of period $ ( 66,764 ) $ ( 72,841 ) (10) System Optimization (Gains) Losses, Net The Company optimizes the Wendy’s system by facilitating Franchise Flips, evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees and, at times, closing certain underperforming restaurants, to further strengthen the franchisee base, support franchisee economics and drive new restaurant development. During the three months ended March 29, 2026, the Company facilitated 41 Franchise Flips. During the three months ended March 30, 2025, the Company did not facilitate any Franchise Flips. Additionally, during the three months ended March 29, 2026 and March 30, 2025, the Company completed the sale of three and two Company-operated restaurants to franchisees, respectively. Gains and losses recognized on dispositions are recorded to “System optimization (gains) 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 March 29, 2026 March 30, 2025 Number of restaurants sold to franchisees 3 2 Proceeds from sales of restaurants (a) $ 1,804 $ 55 Net assets sold (b) ( 1,572 ) ( 169 ) Other ( 232 ) ( 25 ) Loss on sales of restaurants, net — ( 139 ) Gain on sales of other assets, net (c) 1,625 49 System optimization gains (losses), net $ 1,625 $ ( 90 ) _______________ (a) During the three months ended March 29, 2026, the Company received net cash proceeds of $ 1,804 related to the sale of three Company-operated restaurants as part of the Company’s strategic build to suit development fund. These proceeds are included within operating activities in the Company’s condensed consolidated statements of cash flows. (b) Net assets sold consisted primarily of equipment. (c) During the three months ended March 29, 2026, the Company received net cash proceeds of $ 2,796 , primarily from the sale of surplus and other properties. 17 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Assets Held for Sale As of March 29, 2026 and December 28, 2025, the Company had assets held for sale of $ 21,783 and $ 3,696 , 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 March 29, 2026 March 30, 2025 Organizational Redesign Plan $ ( 201 ) $ ( 950 ) Other reorganization and realignment plans 39 258 Reorganization and realignment costs $ ( 162 ) $ ( 692 ) 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”). Additionally, in January 2024, the Board of Directors announced the appointment of a new President and Chief Executive Officer and the departure of the Company’s previous President and Chief Executive Officer. During the three months ended March 29, 2026 and March 30, 2025, the Company recognized costs totaling $( 201 ) and $( 950 ), respectively, which primarily included reversals of severance accruals. The Company does not expect to incur any material additional costs under the Organizational Redesign plan. The following is a summary of the costs recorded as a result of the Organizational Redesign Plan: Three Months Ended Total Incurred Since Inception March 29, 2026 March 30, 2025 Severance and related employee costs (a) $ ( 228 ) $ ( 1,088 ) $ 12,098 Recruitment and relocation costs — 13 736 Third-party and other costs — — 1,116 ( 228 ) ( 1,075 ) 13,950 Share-based compensation (b) 27 125 2,527 Total organizational redesign $ ( 201 ) $ ( 950 ) $ 16,477 _______________ (a) The three months ended March 29, 2026 and March 30, 2025 include reversals of severance accruals as a result of changes in estimates. (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. 18 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) As of March 29, 2026, 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. Balance December 28, 2025 Charges Payments Balance March 29, 2026 Severance and related employee costs $ 378 $ ( 228 ) $ ( 144 ) $ 6 Recruitment and relocation costs — — — — Third-party and other costs — — — — $ 378 $ ( 228 ) $ ( 144 ) $ 6 Balance December 29, 2024 Charges Payments Balance March 30, 2025 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 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 29, 2026 and March 30, 2025. The Company does not expect to incur any material additional costs under these plans. (12) 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 March 29, 2026 March 30, 2025 Company-operated restaurants $ 1,169 $ 1,187 Restaurants leased or subleased to franchisees 1,358 — Surplus properties 45 234 $ 2,572 $ 1,421 19 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (13) Supplemental Cash Flow Information The following table includes supplemental non-cash investing and financing activities: Three Months Ended March 29, 2026 March 30, 2025 Supplemental non-cash investing and financing activities: Capital expenditures included in accounts payable $ 7,915 $ 7,197 Finance leases 22,331 17,849 The following table includes a reconciliation of cash, cash equivalents and restricted cash: March 29, 2026 December 28, 2025 Reconciliation of cash, cash equivalents and restricted cash at end of period: Cash and cash equivalents $ 298,740 $ 300,833 Restricted cash 39,295 39,207 Restricted cash, included in Advertising funds restricted assets 23,996 17,632 Total cash, cash equivalents and restricted cash $ 362,031 $ 357,672 (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 $ 94,720 as of March 29, 2026. These leases extend through 2045. We have had no judgments against us as guarantor of these leases as of March 29, 2026. 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 29, 2026. Letters of Credit As of March 29, 2026, the Company had outstanding letters of credit with various parties totaling $ 28,960 . 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 Except as described below, the Company did not have any significant changes in or transactions with its related parties during the current fiscal period since those reported in the Form 10-K. TimWen Lease and Management Fee Payments 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 $ 4,763 and $ 4,798 under these lease agreements during the three months ended March 29, 2026 and March 30, 2025, respectively, which has been recorded to “Franchise rental expense.” In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement 20 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) of $ 59 and $ 56 during the three months ended March 29, 2026 and March 30, 2025, respectively, which is included as a reduction to “General and administrative.” Transactions with Yellow Cab Certain family members and/or affiliates of Mr. Nelson Peltz, our former Chairman and Chairman Emeritus, Mr. Peter May, our Senior Vice Chairman, and Mr. Matthew Peltz, our former Vice Chairman, hold minority ownership interests in Yellow Cab Holdings, LLC (“Yellow Cab”), a Wendy’s franchisee that, as of March 29, 2026 owned and operated 87 Wendy’s restaurants, and/or certain of the operating companies managed by Yellow Cab. In addition, Mr. Bradley Peltz, a director of the Company, is a Managing Director of, and holds a minority ownership interest in, Yellow Cab. During the three months ended March 29, 2026 and March 30, 2025, the Company recognized $ 3,827 and $ 3,664 , 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 March 29, 2026 and December 28, 2025, $ 1,336 and $ 1,045 , 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 Ms. Kristin Dolan, a director of the Company, serves as the Chief Executive Officer of AMC Networks Inc. (“AMC”). During the three months ended March 30, 2025, the Company purchased approximately $ 300 of advertising time from a subsidiary of AMC. During the three months ended March 29, 2026, no advertising time was purchased 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. There were no amounts due to AMC as of March 29, 2026 and December 28, 2025. (16) Legal and Environmental Matters The Company is involved in litigation and claims incidental to our business. 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 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. In addition, most cases seek an indeterminate amount of damages and many involve multiple parties. 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. 21 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (17) Segment Information Wendy’s U.S. revenue, significant segment expenses and segment adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) are as follows: Three Months Ended March 29, 2026 March 30, 2025 Wendy’s U.S. revenue $ 444,159 $ 429,614 Wendy’s U.S. expense Cost of sales 194,296 181,237 Franchise support and other costs 18,256 13,178 Advertising fund expense 99,273 91,760 General and administrative 22,458 22,424 Other segment items (a) 13 38 Wendy’s U.S. adjusted EBITDA $ 109,863 $ 120,977 _______________ (a) Other segment items for the three months ended March 29, 2026 primarily include professional fees. Other segment items for the three months ended March 30, 2025 primarily include lease buyout activity and professional fees. Wendy’s International revenue, significant segment expenses and segment adjusted EBITDA are as follows: Three Months Ended March 29, 2026 March 30, 2025 Wendy’s International revenue $ 36,927 $ 34,721 Wendy’s International expense Cost of sales 6,753 6,932 Advertising fund expense (a) 9,071 9,912 General and administrative 8,225 6,437 Other segment items (b) 2,299 1,996 Wendy’s International adjusted EBITDA $ 10,579 $ 9,444 _______________ (a) Includes advertising fund expense of $ 159 for the three months ended March 30, 2025 related to the Company’s funding of incremental advertising. There was no funding of incremental advertising during the three months ended March 29, 2026. In addition, includes other international-related advertising deficit of $ 3 and $ 1,153 for the three months ended March 29, 2026 and March 30, 2025, respectively. (b) Other segment items primarily include franchise support and other costs. 22 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (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 29, 2026 March 30, 2025 Global Real Estate & Development revenue $ 59,551 $ 59,137 Global Real Estate & Development expense Franchise rental expense 30,176 30,701 General and administrative 5,297 5,220 Other segment items (a) ( 3,974 ) ( 1,460 ) Global Real Estate & Development adjusted EBITDA $ 28,052 $ 24,676 _______________ (a) Other segment items primarily include equity in earnings from our TimWen joint venture, gains on sales-type leases and franchise support and other costs. Equity in earnings from our TimWen joint venture was $ 2,363 and $ 2,252 for the three months ended March 29, 2026 and March 30, 2025, respectively. The following table reconciles profit by segment to the Company’s consolidated income before income taxes: Three Months Ended March 29, 2026 March 30, 2025 Wendy’s U.S. $ 109,863 $ 120,977 Wendy’s International 10,579 9,444 Global Real Estate & Development 28,052 24,676 Total segment adjusted EBITDA 148,494 155,097 Unallocated franchise support and other costs ( 310 ) ( 587 ) Advertising funds (deficit) surplus ( 271 ) 144 Unallocated general and administrative (a) ( 36,863 ) ( 34,123 ) Depreciation and amortization (exclusive of amortization of cloud computing arrangements shown separately below) ( 40,575 ) ( 36,549 ) Amortization of cloud computing arrangements ( 4,762 ) ( 4,167 ) System optimization gains (losses), net 1,625 ( 90 ) Reorganization and realignment costs 162 692 Impairment of long-lived assets ( 2,572 ) ( 1,421 ) Unallocated other operating (expense) income, net ( 7 ) 4,130 Interest expense, net ( 34,106 ) ( 31,477 ) Investment loss, net — ( 1,718 ) Other income, net 3,350 4,986 Income before income taxes $ 34,165 $ 54,917 _______________ (a) Includes corporate overhead costs, such as employee compensation and related benefits. 23 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (18) New Accounting Standards Measurement of Credit Losses for Accounts Receivable and Contract Assets In July 2025, the Financial Accounting Standards Board (“FASB”) issued an amendment to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets for revenue arising from contracts with customers. The Company adopted this amendment during the first quarter of 2026 and has elected the practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the receivables when estimating expected credit losses. The adoption of this amendment did not have a material impact on our condensed consolidated financial statements. 24