Wendy's Reports 2.1% Revenue Decline and Decreased Net Income in Q1 2025

Wendy's Company reported a decline in financial performance for the first quarter of 2025, with total revenues decreasing by 2.1% to $523.5 million compared to $534.8 million in the same period last year. The company's net income also fell, reaching $39.2 million, down from $42.0 million in the prior year. Basic net income per share remained stable at $0.20, while diluted earnings per share decreased to $0.19 from $0.20. The decline in revenue was attributed to a decrease in same-restaurant sales, which fell by 2.1% globally, with U.S. same-restaurant sales down 2.8%, although international same-restaurant sales increased by 2.3%.

In terms of operational metrics, Wendy's reported a total of 7,308 restaurants worldwide as of March 30, 2025, with 5,958 located in the U.S. The company opened 68 net new restaurants during the quarter, contributing to its ongoing expansion strategy. However, the company also faced challenges, including a decrease in customer traffic and increased labor costs, which impacted overall sales and profitability. The company’s global same-restaurant sales decreased by 1.2% on a two-year basis, indicating ongoing competitive pressures in the quick-service restaurant sector.

Wendy's strategic initiatives included a focus on digital growth, with digital sales increasing from approximately 16.8% of global systemwide sales in the first quarter of 2024 to about 20.3% in the first quarter of 2025. The company has invested in enhancing its mobile apps and loyalty programs, as well as establishing delivery partnerships to improve customer engagement. Additionally, Wendy's is continuing its system optimization initiative, which involves transitioning from company-operated to franchised restaurants, although no franchise flips were facilitated during the quarter.

The company’s financial position showed a decrease in cash and cash equivalents, totaling $335.3 million as of March 30, 2025, down from $450.5 million at the end of the previous fiscal year. Wendy's also reported a significant increase in cash used in financing activities, primarily due to stock repurchases amounting to $124.1 million during the quarter. The company remains committed to its stock repurchase program, with $110.9 million available under the current authorization. Looking ahead, Wendy's anticipates continued challenges from inflationary pressures and competitive dynamics but remains focused on driving growth through digital initiatives and restaurant expansion.