What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 171 added, 133 removed, 249 unchanged (55% 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 March 29, 2026 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 June 28, 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.

10 unchanged sentences

Wendy’s opened its first restaurant in Columbus, Ohio in 1969.

Today, Wendy’s is the second largest quick-service restaurant company in the hamburger sandwich segment in the U.S.

Today, Wendy’s is one of the largest quick-service restaurant companies in the hamburger sandwich segment in the U.S.

based on traffic and dollar share, and the third largest globally with 7,180 restaurants in the U.S.

and 38 foreign countries and U.S.

territories as of March 29, 2026.

territories as of June 28, 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.

17 unchanged sentences

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

All three-month periods presented herein contain 13 weeks.

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

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

Executive Overview

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.

As of June 28, 2026, the Wendy’s restaurant system was comprised of 7,180 restaurants, with 5,724 Wendy’s restaurants in operation in the U.S.

restaurants, 420 were operated by the Company and 5,304 were operated by a total of 206 franchisees.

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

In addition, at June 28, 2026, there were 1,456 Wendy’s restaurants in operation in 38 foreign countries and U.S.

Of the international restaurants, 1,446 were operated by a total of 116 franchisees and 10 were operated by the Company in the United Kingdom (the “U.K.”).

2 unchanged sentences

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.

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 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.

While it evaluates its strategy, the Company is taking action across five areas:

rebuilding a quality menu at compelling value, marketing that drives demand, operational excellence, a digital experience that builds frequency and restaurants as an engine for growth.

During the second quarter of 2026, the Company learned that its franchise partner in China had experienced leadership changes and the parties amended the previously disclosed franchise agreement to provide for a termination right for either party without liability prior to December 12, 2026.

Key Business Measures

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

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.

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.

8 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.

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;

Second Quarter Highlights

• Global systemwide sales were $3.42 billion in the second quarter of 2026 compared with $3.66 billion in the second quarter of 2025, a decrease of 6.5% on a constant currency basis;

• International systemwide sales were $546.7 million in the second quarter of 2026 compared with $528.9 million in the second quarter of 2025, an increase of 3.4% on a constant currency basis;

• Revenues increased 1.7% to $570.6 million in the second quarter of 2026 compared with $560.9 million in the second quarter of 2025;

• Global same-restaurant sales decreased 6.3%, U.S.

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.

same-restaurant sales decreased 7.0% and international same-restaurant sales decreased 2.3% compared with the second quarter of 2025;

• Global Company-operated restaurant margin was 13.6% in the second quarter of 2026, a decrease of 200 basis points compared with the second quarter of 2025;

• Income before income taxes decreased 36.0% to $48.6 million in the second quarter of 2026 compared with $75.9 million in the second quarter of 2025;

• Digital sales increased to approximately 23.7% of global systemwide sales in the second quarter of 2026 compared with approximately 20.5% in the second quarter of 2025;

• Systemwide restaurant count decreased by 71 net restaurants in the second quarter of 2026.

Year-to-Date Highlights

• Global systemwide sales were $6.64 billion in the first six months of 2026 compared with $7.05 billion in the first six months of 2025, a decrease of 6.0% on a constant currency basis;

• International systemwide sales were $1.06 billion in the first six months of 2026 compared with $1.00 billion in the first six months of 2025, an increase of 4.6% on a constant currency basis;

• Revenues increased 2.5% to $1.11 billion in the first six months of 2026 compared with $1.08 billion in the first six months of 2025;

• Global same-restaurant sales decreased 6.5%, U.S.

same-restaurant sales decreased 7.4% and international same-restaurant sales decreased 1.4% compared with the first six months of 2025;

• Global Company-operated restaurant margin was 12.3% in the first six months of 2026, a decrease of 270 basis points compared with the first six months of 2025;

• Income before income taxes decreased 36.8% to $82.7 million in the first six months of 2026 compared with $130.8 million in the first six months of 2025;

• Digital sales increased to approximately 23.6% of global systemwide sales in the first six months of 2026 compared with approximately 20.4% in the first six months of 2025;

• Systemwide restaurant count decreased by 217 net restaurants in the first six months 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 first quarter of 2026 and 2025.

First Quarter

2026 2025 Change

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 the first six months of 2026 and 2025.

Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Sales $ 240.0 $ 232.9 $ 7.1 $ 465.5 $ 452.4 $ 13.1

11 unchanged sentences

Amortization of cloud computing arrangements 4.6 4.1 0.5 9.3 8.2 1.1

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

System optimization gains, net (0.7) (0.4) (0.3) (2.3) (0.3) (2.0)

Reorganization and realignment costs — 0.2 (0.2) (0.2) (0.5) 0.3

9 unchanged sentences

Net income $ 32.6 $ 55.1 $ (22.5) $ 55.3 $ 94.3 $ (39.0)

First Quarter

Second Quarter Six Months

Total Revenues 2025 % of

Total Revenues 2026 % of

Total Revenues 2025 % of

Total Revenues

10 unchanged sentences

$ 570.6 100.0 % $ 560.9 100.0 % $ 1,111.2 100.0 % $ 1,084.4 100.0 %

First Quarter

Second Quarter Six Months

Sales 2025 % of

Sales 2026 % of

Sales 2025 % of

Cost of sales:

4 unchanged sentences

Total cost of sales $ 207.3 86.4 % $ 196.5 84.4 % $ 408.3 87.7 % $ 384.7 85.0 %

First Quarter

Second Quarter Six Months

Sales 2025 % of

Sales 2026 % of

Sales 2025 % of

Company-operated restaurant margin:

2 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.

First Quarter

Second Quarter Six Months

2026 2025 2026 2025

Key business measures:

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

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

(b) During the second quarter of 2026 and 2025, global systemwide sales decreased 6.5% and 1.8%, respectively, U.S.

systemwide sales decreased 8.2% and 3.3%, respectively, and international systemwide sales increased 3.4% and 8.7%, respectively, on a constant currency basis.

First Quarter

During the first six months of 2026 and 2025, global systemwide sales decreased 6.0% and 1.4%, respectively, U.S.

systemwide sales decreased 7.7% and 3.0%, respectively, and international systemwide sales increased 4.6% and 8.8%, respectively, on a constant currency basis.

Second Quarter

Company-operated U.S.

1 unchanged sentence

Restaurant count:

Restaurant count at March 29, 2026

420 5,385 11 1,435 7,251

Opened 1 20 — 27 48

Closed — (102) (1) (16) (119)

Net (sold to) purchased by franchisees (1) 1 — — —

Restaurant count at June 28, 2026

420 5,304 10 1,446 7,180

Company-operated U.S.

Franchised International Company-operated International Franchised Systemwide

Restaurant count at December 28, 2025

3 unchanged sentences

Net (sold to) purchased by franchisees (4) 4 — — —

Restaurant count at March 29, 2026

Restaurant count at June 28, 2026

420 5,304 10 1,446 7,180

Sales First Quarter

2026 2025 Change

Sales Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Sales $ 240.0 $ 232.9 $ 7.1 $ 465.5 $ 452.4 $ 13.1

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

The increase in sales during the second quarter and the first six months of 2026 was primarily due to (1) the impact of the Company’s acquisition of franchise-operated restaurants during the third quarter of 2025 of $15.8 million and $29.4 million, respectively, and (2) net new restaurant development of $2.9 million and $5.9 million, respectively.

During the second quarter and the first six months of 2026, these impacts were partially offset by (1) a 4.3% and 4.5% decrease in global Company-operated same-restaurant sales of $9.2 million and $18.6 million, respectively, and (2) the impact of the sale of Company-operated restaurants to franchisees of $3.2 million and $5.2 million, respectively.

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

Franchise Royalty Revenue and Fees Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Franchise royalty revenue $ 123.6 $ 132.1 $ (8.5) $ 239.8 $ 253.9 $ (14.1)

1 unchanged sentence

$ 149.8 $ 156.2 $ (6.4) $ 297.6 $ 301.4 $ (3.8)

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 royalty revenue during the second quarter and the first six months of 2026 decreased primarily due to a 6.4% and 6.7% decrease in global franchise same-restaurant sales, respectively.

Franchise same-restaurant sales during the second quarter and the first six months of 2026 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 2026 was primarily due to the impact of system optimization related to restaurant closures and hours of operation flexibility.

Franchise Rental Income Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Franchise rental income $ 53.4 $ 60.4 $ (7.0) $ 112.3 $ 118.9 $ (6.6)

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

The decrease in franchise rental income during the second quarter and the first six months of 2026 was primarily due to (1) the impact of assigning certain existing leases to franchisees of $5.3 million and $6.1 million, respectively, and (2) amending certain existing leases during the second quarter of 2026 of $1.0 million.

During the second quarter and the first six months of 2026, these changes were partially offset by entering into new leases of $0.5 million and $1.2 million, respectively.

Advertising Funds Revenue Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Advertising funds revenue $ 127.4 $ 111.4 $ 16.0 $ 235.8 $ 211.7 $ 24.1

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

The increase in advertising funds revenue during the second quarter and the first six months of 2026 was primarily due to (1) local and regional advertising funds being reallocated to U.S.

national advertising of approximately $16.0 million and $30.0 million, respectively, and (2) non-recurring incentives earned from a vendor during the second quarter of 2026 of $11.5 million.

During the second quarter and the first six months of 2026, these increases were partially offset by a decrease in franchise same-restaurant sales of approximately $9.0 million and $16.0 million, respectively.

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

2026 2025 Change 2026 2025 Change

Food and paper 31.4 % 31.2 % 0.2 % 31.3 % 31.0 % 0.3 %

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86.4 % 84.4 % 2.0 % 87.7 % 85.0 % 2.7 %

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.

The increase in cost of sales, as a percent of sales, during the second quarter and the first six months 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 First Quarter

2026 2025 Change

Franchise Support and Other Costs Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Franchise support and other costs $ 22.6 $ 17.1 $ 5.5 $ 44.6 $ 33.7 $ 10.9

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

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

Franchise Rental Expense Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Franchise rental expense $ 28.0 $ 32.6 $ (4.6) $ 58.2 $ 63.3 $ (5.1)

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

The decrease in franchise rental expense during the second quarter and the first six months of 2026 was primarily due to (1) the impact of assigning certain leases to franchisees, (2) amending certain existing leases and (3) lease terminations.

Advertising Funds Expense Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Advertising funds expense $ 127.9 $ 111.4 $ 16.5 $ 236.5 $ 212.9 $ 23.6

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

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

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

General and Administrative Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Professional fees $ 19.3 $ 13.9 $ 5.4 $ 34.9 $ 28.0 $ 6.9

Employee compensation and benefits 39.0 36.5 2.5 79.4 75.0 4.4

Other, net 7.9 9.1 (1.2) 24.7 24.7 —

$ 66.2 $ 59.5 $ 6.7 $ 139.0 $ 127.7 $ 11.3

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

The increase in general and administrative expenses during the second quarter and the first six months of 2026 was primarily due to investments in (1) professional services and (2) employee compensation and benefits.

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

2026 2025 Change 2026 2025 Change

Restaurants $ 19.1 $ 18.1 $ 1.0 $ 40.1 $ 35.8 $ 4.3

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$ 38.1 $ 37.0 $ 1.1 $ 78.6 $ 73.5 $ 5.1

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

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

Amortization of Cloud Computing Arrangements Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Amortization of cloud computing arrangements $ 4.6 $ 4.1 $ 0.5 $ 9.3 $ 8.2 $ 1.1

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.

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

System Optimization Gains, Net Second Quarter Six Months

2026 2025 Change 2026 2025 Change

System optimization gains, net $ 0.7 $ 0.4 $ 0.3 $ 2.3 $ 0.3 $ 2.0

System optimization gains, net during the second quarter and the first six months 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

Reorganization and Realignment Costs Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Organizational Redesign Plan $ — $ 0.1 $ (0.1) $ (0.2) $ (0.8) $ 0.6

1 unchanged sentence

$ — $ 0.2 $ (0.2) $ (0.2) $ (0.5) $ 0.3

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.

During the first six months of 2026 and 2025, the Company recognized costs under the Organizational Redesign Plan of $(0.2) million and $(0.8) 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 First Quarter

2026 2025 Change

Impairment of Long-Lived Assets Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Impairment of long-lived assets $ 3.1 $ 1.7 $ 1.4 $ 5.7 $ 3.1 $ 2.6

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

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

The increase in impairment of long-lived assets during the first six months of 2026 was primarily due to (1) losses from the remeasurement to fair value of assets leased and/or subleased to franchisees in connection with the closure of franchise-operated restaurants and (2) higher impairment charges resulting from the deterioration in operating performance of certain Company-operated restaurants.

Other Operating Income, Net Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Claim settlement $ — $ — $ — $ — $ 4.0 $ (4.0)

Lease buyout 2.4 (0.1) 2.5 3.3 0.1 3.2

Gains on sales-type leases 0.2 — 0.2 2.1 — 2.1

1 unchanged sentence

$ 5.8 $ 3.1 $ 2.7 $ 10.7 $ 9.3 $ 1.4

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

The increase in other operating income, net during the second quarter of 2026 was primarily due to an increase in lease buyout activity.

The increase in other operating income, net during the first six months of 2026 was primarily due to (1) an increase in lease buyout activity and (2) gains on new and modified sales-type leases.

During the first six months of 2026, these increases were partially offset by the settlement of a claim during the prior year.

Interest Expense, Net Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Interest expense, net $ 33.9 $ 30.9 $ 3.0 $ 68.0 $ 62.4 $ 5.6

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

The increase in interest expense, net during the second quarter and the first six months 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 Second Quarter Six Months

2026 2025 Change 2026 2025 Change

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

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

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

2026 2025 Change 2026 2025 Change

Other income, net $ 3.2 $ 2.5 $ 0.7 $ 6.5 $ 7.5 $ (1.0)

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

The increase in other income, net during the second quarter of 2026 was primarily due to an increase in interest income, reflecting (1) interest earned on accounts receivable from a franchisee and (2) interest income related to a tax refund.

The decrease in other income, net during the first six months of 2026 was primarily due to a decrease in interest income, reflecting (1) lower interest rates and (2) lower balances of cash equivalents.

These decreases were partially offset by interest earned on accounts receivable from a franchisee.

Provision for Income Taxes Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Income before income taxes $ 48.6 $ 75.9 $ (27.3) $ 82.7 $ 130.8 $ (48.1)

3 unchanged sentences

32.8 % 27.4 % 5.4 % 33.1 % 27.9 % 5.2 %

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.

The increase in the effective tax rate for the second quarter and the first six months of 2026 was primarily due to the tax effects of our foreign operations and lower income before income taxes.

Segment Information

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

First Quarter

2026 2025 Change

Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Sales $ 234.0 $ 226.0 $ 8.0 $ 453.3 $ 438.7 $ 14.6

5 unchanged sentences

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.

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

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.

Same-restaurant sales decreased during the second quarter and the first six months 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 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.

segment profit during the second quarter and the first six months of 2026 was primarily due to (1) higher advertising fund expenses, (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,” and (3) higher franchise support and other costs.

These changes were partially offset by higher revenues.

Wendy’s International

First Quarter

2026 2025 Change

Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Sales $ 6.0 $ 6.9 $ (0.9) $ 12.2 $ 13.6 $ (1.4)

4 unchanged sentences

Segment profit $ 11.9 $ 13.2 $ (1.3) $ 22.5 $ 22.7 $ (0.2)

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.

The increase in Wendy’s International revenues during the second quarter and the first six months of 2026 was primarily due to (1) an increase in franchise fees and (2) net new restaurant development.

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

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

The decrease in Wendy’s International segment profit during the second quarter and the first six months of 2026 was primarily due to (1) an increase in franchise support and other costs and (2) higher general and administrative expenses.

impacts were partially offset by (1) higher revenues and (2) lower cost of sales, as a percent of sales, for Company-operated restaurants.

Global Real Estate & Development

First Quarter

2026 2025 Change

Second Quarter Six Months

2026 2025 Change 2026 2025 Change

Franchise fees $ 0.3 $ 0.5 $ (0.2) $ 1.0 $ 1.2 $ (0.2)

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Segment profit $ 27.5 $ 27.3 $ 0.2 $ 55.5 $ 52.0 $ 3.5

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.

The decrease in Global Real Estate & Development revenues during the second quarter and the first six months of 2026 was primarily due to a decrease 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 second quarter and the first six months of 2026 was primarily due to (1) an increase in lease buyout activity and (2) entering into new leases.

These changes were partially offset by the impact of assigning certain existing leases to franchisees.

During the first six months of 2026, Global Real Estate & Development segment profit also increased due to gains on new and modified sales-type leases.

Liquidity and Capital Resources

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

As of June 28, 2026, cash, cash equivalents and restricted cash totaled $394.8 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 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.

During the six months ended June 28, 2026, no shares were repurchased under the January 2023 Authorization.

As of June 28, 2026, the Company had $35.0 million of availability remaining under the January 2023 Authorization.

On March 16, 2026 and June 15, 2026, the Company paid quarterly cash dividends per share of $.14, aggregating $53.3 million.

On August 7, 2026, the Company announced a dividend of $.07 per share to be paid on September 15, 2026 to stockholders of record as of September 1, 2026.

If the Company pays regular quarterly cash dividends for the remainder of 2026 at the same rate declared in the third quarter of 2026, the Company’s total cash requirement for dividends for the remainder of 2026 will be approximately $26.7 million based on the number of shares of its common stock outstanding at July 31, 2026.

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

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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.

During the three months ended June 28, 2026, the Company borrowed and repaid $2.7 million under the revolving line

As a result, as of June 28, 2026, the Company had no outstanding borrowings under the revolving line of credit.

Subsequent to June 28, 2026, the Company increased the Wendy’s U.S.

advertising fund revolving line of credit to $25.0 million.

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 March 29, 2026.

The Company was in compliance with its debt covenants as of June 28, 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 three months of 2026 and 2025:

First Quarter

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

2026 2025 Change

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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 $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.

Cash provided by operating activities was $160.0 million and $146.0 million in the first six months of 2026 and 2025, respectively.

The change was primarily due to (1) a decrease in cash paid for income taxes and (2) the timing of payments for marketing expenses of the national advertising funds.

These changes were partially offset by (1) lower net income, adjusted for non-cash expenses and (2) the timing of the collection of royalty receivables.

Investing Activities

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.

Cash used in investing activities was $37.8 million and $52.3 million in the first six months of 2026 and 2025, respectively.

The change was primarily due to (1) a decrease in capital expenditures of $7.6 million and (2) a decrease in expenditures associated with the Company’s franchise development fund of $5.5 million.

Financing Activities

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

Cash used in financing activities was $82.7 million and $272.7 million in the first six months of 2026 and 2025, respectively.

The change was primarily due to (1) a decrease in repurchases of the Company’s common stock of $184.6 million and (2) a decrease in dividends of $22.9 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.

These changes were partially offset by a net increase in cash used in long-term debt activities of $15.3 million, reflecting the impact of proceeds and repayments under 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 three months ended March 29, 2026, and we anticipate continued labor and commodity inflation throughout the remainder of 2026.

Inflationary pressures on labor and commodity price increases directly impacted our consolidated results of operations during the six months ended June 28, 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.

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Quantitative and Qualitative Disclosures about Market Risk.

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.

As of June 28, 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