Abstract
The Wendy’s Company will release fiscal fourth-quarter 2025 results on February 13, 2026, Pre-Market; this preview consolidates the latest quarterly actuals, current-quarter forecasts, business-mix detail, and prevailing institutional opinions to frame expectations and what investors will monitor most closely.Market Forecast
Forecasts for the upcoming fiscal fourth quarter indicate revenue of 535.93 million US dollars, down 4.92% year over year, and adjusted EPS of 0.15, down 40.16% year over year. Margin forecasts are not formally provided in the dataset, though the EBIT forecast implies a year-over-year reduction of 23.72%.Company-operated restaurants and franchising remain the revenue backbone, with performance in the quarter expected to hinge on traffic trends, menu mix, pricing cadence, and advertising effectiveness in value-led promotions and daypart extensions. Among the operating lines, franchising is positioned as the most cash-generative segment by mix and economics, with last quarter’s segment revenue at 209.35 million US dollars and segment-level year-over-year growth not disclosed.
Last Quarter Review
In the previous quarter, The Wendy’s Company reported revenue of 549.52 million US dollars, gross profit margin of 34.41%, net profit attributable to the parent company of 44.25 million US dollars with a net profit margin of 8.05%, and adjusted EPS of 0.24; revenue declined 3.04% year over year and adjusted EPS decreased 4.00% year over year.A key financial highlight was the sequential contraction in net profit, with quarter-on-quarter change of -19.70%, reflecting a tougher comparison and a moderation in operating leverage. By line of business, company-operated restaurant sales contributed 233.15 million US dollars, franchising contributed 209.35 million US dollars, and the advertising fund contributed 107.01 million US dollars; segment-level year-over-year growth rates were not disclosed in the available dataset.
Current Quarter Outlook
Company-Operated Restaurants
Company-operated restaurants accounted for 233.15 million US dollars of last quarter’s revenue, representing 42.43% of the mix. For the to-be-reported quarter, results here will be most influenced by traffic elasticity to price, the balance of promotional offers versus everyday value, and mix shifts tied to premium items and limited-time offerings. A key lens will be whether check growth can offset any softness in guest counts, given the forecasted revenue decline and EPS compression. From a margin standpoint, gross profit margin was 34.41% last quarter, and company-operated results typically bear the brunt of commodity and labor variability; investors will watch for signals on protein costs, staffing efficiency, and store-level productivity to infer the trajectory of restaurant-level margins. Execution on throughput and average wait times during key dayparts can support throughput without incremental labor hours, which in turn can mitigate pressure on unit-level profitability.Promotional architecture will be scrutinized in detail. Balanced messaging across value platforms and occasional premium offerings can help sustain traffic without over-reliance on deep discounting. The quarter’s cadence of offers, coupled with the advertising fund’s support, will shape brand salience and deal participation. The health of digital ordering and loyalty adoption is another important read-through for company-operated stores; digital orders can support basket size through curated bundles while lowering order error rates, and they can improve marketing efficiency via targeted offers.
Unit economics remain central. Store-level cash flow is sensitive to small fluctuations in sales, and with EBIT forecast to decline 23.72% year over year in the quarter, the market will assess whether store productivity initiatives can cushion deleverage. Investors will parse commentary or implied datapoints on food cost baskets, labor-hour optimization, maintenance expenses, and utilities to triangulate run-rate margins into the first half of the new fiscal year. Any evidence of stabilization in weekly sales trends through the quarter would help contextualize whether the headline revenue decline is front-half weighted or broad-based.
Franchising
Franchising contributed 209.35 million US dollars last quarter, or 38.10% of revenue, and remains the most promising earnings engine by its structurally higher-margin profile and cash conversion, even though segment-level year-over-year growth was not disclosed. For the quarter to be reported, royalty and fee streams will primarily reflect same-restaurant sales at franchisees and net unit development. With the consolidated revenue forecast lower year over year, the focus shifts to how resilient the royalty base remains and the extent to which franchise performance can stabilize consolidated profitability despite softer top-line momentum.The key questions for this segment revolve around franchisee health, reimaging progress, and unit pipeline execution. A healthy pipeline and steady remodel throughput can indicate confidence among operators and support steady royalty growth once comp momentum normalizes. The advertising fund, which contributed 107.01 million US dollars last quarter, underpins systemwide campaigns; alignment between brand messaging and franchisee value strategies can bolster system traffic and protect royalty flow. If the brand is effectively leveraging daypart extensions and digital channels to stimulate visit frequency, royalty revenue may track more favorably than consolidated revenue suggests.
Beyond the quarter, franchise economics benefit from disciplined capital allocation and robust support resources. Any commentary around streamlining administrative burden, optimizing supply chain arrangements, or enhancing menu engineering can carry positive implications for the sustainability of franchise royalty rates. The forecasted compression in adjusted EPS to 0.15 reflects macro and operational crosscurrents; however, sustained franchising resilience could anchor a base case for earnings stabilization once pricing and mix lap tougher comparisons. Investors will watch for confirmation that royalty rates, collections, and development milestones are holding close to plan despite headline revenue pressure.
Key Stock Price Drivers This Quarter
Price action around the print will likely be driven by the interplay between the top-line outlook and margin credibility. On the top line, the market has positioned for a 4.92% year-over-year decline in revenue to 535.93 million US dollars; any deviation in reported sales or in the forward sales cadence for the early weeks of the new quarter could have an outsized impact on sentiment. Adjusted EPS is forecast to contract to 0.15, down 40.16% year over year, making the earnings algorithm highly sensitive to incremental cost saves, improved promotional efficiency, or a better-than-expected commodity and labor environment.Margins will be closely parsed, particularly given the prior-quarter net profit margin of 8.05% against a gross profit margin of 34.41%. Investors will focus on whether restaurant-level efficiencies and centralized cost measures can mitigate deleverage. Communication around the trajectory of input costs and the pacing of menu pricing actions will carry weight; modest deflation in key ingredients or disciplined labor scheduling can meaningfully influence quarter-over-quarter margin progression. With last quarter’s net profit down 19.70% sequentially, evidence of sequential stabilization would be an incremental positive.
Mix and daypart development can also influence the stock. A sustained build in breakfast or another under-penetrated daypart can expand utilization without significant incremental fixed cost, supporting royalties and store-level margins. Digital mix improvements, loyalty engagement, and targeted offers can enhance check while preserving value perceptions, shaping both traffic and profitability. The advertising fund’s allocation across broadcast, digital, and social channels will be assessed for its effectiveness in generating traffic at an efficient cost per acquisition, which in turn informs the sustainability of promotional strategies into the next quarter.
Analyst Opinions
Institutional opinions over the last six months skew Neutral, with multiple firms maintaining Hold ratings and one prominent Buy call. RBC Capital maintained a Hold on October 27, 2025 with a price target of 10.00 US dollars and reaffirmed a Hold on January 22, 2026 with a price target of 8.50 US dollars, indicating a cautious stance into the fiscal fourth-quarter print. Barclays also reaffirmed a Hold with a 9.00 US dollars price target, while Oppenheimer maintained a Hold without a disclosed target in the summarized item. JPMorgan remains the primary positive outlier, reiterating a Buy with a 12.00 US dollars price target, but the center of gravity across recent commentary is Neutral.The Neutral majority reflects a market posture that emphasizes execution proof points over aggressive positioning ahead of results. Firms highlighting Hold ratings appear to be weighing the forecasted decline in revenue to 535.93 million US dollars and the anticipated contraction in adjusted EPS to 0.15, down 40.16% year over year, against the company’s durable franchise fee base and operating levers around menu strategy and cost control. This stance suggests patience for clearer evidence of traffic stabilization and margin traction before shifting to a more directional view. Commentary that frames the risk-reward as balanced typically points to valuation alignment with near-term fundamentals and a need for improved visibility on sales cadence and the cost line.
From an analytical perspective, the Neutral view aligns with the mechanics of this quarter’s setup. The forecast panel implies EBIT down 23.72% year over year, which raises the bar for an upside surprise without equally compelling offsets. Yet the segment mix—where franchising represented 38.10% of last quarter’s revenue alongside advertising fund support—can buffer earnings variability when company-operated pressures intensify. In that context, the Neutral camp is focusing on a few key deliverables: evidence of sales elasticity meeting expectations under current promotional constructs, indications that store-level efficiencies can curb deleverage, and clarity on early-quarter trends post the reporting period.
The Neutral cohort is also attentive to how management balances value messaging with brand equity. Over-indexing to discounting can solve for near-term traffic but weigh on profitability and conditioning of guest behavior, while calibrated value can widen the funnel without materially diluting unit economics. Analysts maintaining Hold ratings are likely to parse the revenue bridge—traffic versus check, price versus mix—and the margin bridge—COGS, labor, and other operating expenses—to assess whether the negative year-over-year EPS delta of 40.16% looks transitory or sticky. A coherent roadmap that underscores controllable cost actions and points to improving weekly sales trajectories could be sufficient to shift expectations toward stabilization in the first half of the new fiscal year.
Overall, the Neutral majority signals a preference to let the numbers reset before embracing a more directional thesis. Should The Wendy’s Company deliver revenue at or above 535.93 million US dollars with stable-to-improving qualitative commentary on traffic and cost controls, the Neutral stance could consolidate around a stabilization narrative. Conversely, if reported results confirm deeper or more persistent deleverage than implied by the current forecasts, the Neutral group may await clearer signs of commercial reacceleration or additional self-help before revisiting their rating frameworks. In the interim, attention will remain on the balance of company-operated performance, franchisee health, and the degree to which advertising and digital engagement can support transaction-driven recovery without impairing profitability.
Comments