Overview

• U.S. fast-food chain's Q1 adjusted revenue missed analyst expectations, global systemwide sales fell 5.5%

• Adjusted EPS and adjusted EBITDA for Q1 both beat analyst expectations

• Company signed franchise deal to build up to 1,000 restaurants in China

Outlook

• Wendy's reaffirms 2026 global systemwide sales growth to be approximately flat

• Company expects 2026 adjusted EBITDA of $460 mln to $480 mln

• Wendy's sees 2026 adjusted EPS between $0.56 and $0.60

Result Drivers

• U.S. SALES DECLINE - Co said global systemwide sales fell due to lower U.S. same-restaurant sales, partially offset by new restaurant openings

• MARGIN PRESSURE - Decrease in U.S. company-operated restaurant margin attributed to lower traffic, commodity inflation, and labor rate inflation

• INTERNATIONAL GROWTH - International systemwide sales rose 6.0%, supported by expansion in key growth markets

Company press release: ID:nPn5ybLMYa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue		$540.60 mln
Q1 Adjusted Revenue	Miss	$432.30 mln	$517.97 mln (20 Analysts)
Q1 Adjusted EPS	Beat	$0.12	$0.10 (26 Analysts)
Q1 EPS		$0.12
Q1 Adjusted EBITDA	Beat	$111.30 mln	$102.66 mln (22 Analysts)
Q1 Global Systemwide Sales Growth		-5.50%

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 20 "hold" and 5 "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy."

• Wall Street's median 12-month price target for Wendy's Co is $8.00, about 15.1% above its May 7 closing price of $6.95

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 9 three months ago

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