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Management attributed the 8.3% global system-wide sales decline in Q4 primarily to a significant reduction in U.S. marketing spend and a difficult year-over-year comparison against the prior year’s SpongeBob collaboration.
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The ‘Project Fresh’ turnaround plan was introduced to address operational drift and a previous over-reliance on short-term discounting versus long-term brand building.
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A comprehensive consumer segmentation study revealed that Wendy’s had neglected its core quality differentiator, leading to a strategic pivot back to premium hamburger innovation after zero such launches in 2025.
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U.S. company-operated restaurants outperformed the broader system by 310 basis points in 2025, serving as a proof point for the ‘people activation’ and performance management playbooks now being scaled to franchisees.
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International expansion remains a primary growth engine, achieving its 21st consecutive quarter of growth and reaching a record 121 net new units across 38 total markets.
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Digital sales reached an all-time high mix of 20% in the U.S., driven by app redesigns and gamification features that improved customer engagement and conversion rates.
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2026 is designated as a rebuilding year with global system-wide sales expected to be approximately flat, factoring in a 2% benefit from a 53rd week offset by a 4% impact from system optimization closures.
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The marketing strategy will shift from limited-time price promotions to a permanent ‘Biggie Deals’ architecture with $4, $6, and $8 tiers to capture snacking and value-conscious occasions.
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Management expects U.S. same-restaurant sales to improve sequentially throughout 2026 as brand revitalization and operational excellence initiatives take hold in the second half of the year.
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The company is providing franchisees with increased flexibility regarding breakfast operating hours, allowing resources to be reallocated to higher-growth late-night and evening dayparts.
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Capital allocation will prioritize AUV growth in the U.S. and international unit development, including a $20 million reduction in U.S. build-to-suit spending to fund field operations and technology.
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The company plans to close approximately 5% to 6% of underperforming U.S. restaurants by the first half of 2026 to improve overall system health and franchisee economics.
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System optimization initiatives are expected to create a $15 million to $20 million drag on 2026 adjusted EBITDA.
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Adjusted EBITDA guidance of $460 million to $480 million reflects a reset of incentive and stock compensation following the previous CEO’s departure.
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Commodity and labor inflation are both projected at approximately 4% for 2026, with beef prices remaining a specific headwind for margins.
