U.S. same-restaurant sales at Wendy's fell 7.0% in the second quarter ended June 28, 2026 — the steepest domestic comp decline the QSR burger chain has reported in recent years — as global systemwide sales retreated 6.5% to approximately $3.4 billion. The results cap a first half in which U.S. systemwide sales dropped 7.7% and net income fell 41.4% year over year to $32.6 million, underscoring the scale of the challenge facing newly returned President and CEO Bob Wright.
The Numbers
Revenue of $571 million edged up 1.7% on a reported basis, lifted by higher advertising-fund revenue after local ad funds were reallocated to the national pool and by incremental Company-operated sales tied to a franchise acquisition completed in Q3 2025. Adjusted EBITDA came in at $124.1 million, down 15.4% from $146.6 million a year ago. U.S. Company-operated restaurant margin compressed 240 basis points to 13.8%, pressured by commodity inflation, a traffic decline, and labor rate inflation that only partially offset gains in average check and labor efficiencies. Franchise royalty revenue slid as the comp decline flowed through the royalty rate calculation, while G&A expense climbed 11.3% to $66.2 million, driven by professional services spend and employee compensation tied to the new leadership's assessment work. On a year-to-date basis, free cash flow improved 9.9% to $120.3 million, aided by lower capital expenditures and reduced franchise development fund outlays.
The domestic unit count fell to 5,724 restaurants from 5,967 a year earlier — a net reduction of 81 U.S. locations in the quarter alone and 245 on a year-to-date basis — as franchisee closures accelerated. International continued to outperform: same-restaurant sales dipped just 2.3% in Q2 while systemwide international sales rose 3.4%, and the international unit count grew to 1,456. Total global restaurant count stands at 7,180.
Capital & Outlook
Wright cited five priority lanes for the turnaround: rebuilding a quality menu at compelling value, demand-driving marketing, operational excellence, a digital experience that builds daypart frequency, and restaurant development as a growth engine. To free capital for those initiatives, the board cut the quarterly dividend from its prior level to $0.07 per share, reducing the annualized rate to $0.28. No shares were repurchased in Q2, and buyback activity has been suspended into Q3 with approximately $35.0 million remaining under the authorization expiring in February 2027. Critically, the company withdrew its 2026 financial outlook entirely, saying new leadership needs time to finalize the turnaround plan before reestablishing guidance.
The competitive backdrop is unforgiving. Value-driven traffic battles across the QSR burger segment — pitting Wendy's against McDonald's, Burger King parent Restaurant Brands International, and a resurgent Jack in the Box — have intensified as cost-conscious consumers trade down or reduce visit frequency. Wendy's domestic traffic problem reflects a broader value-wars dynamic reshaping QSR that has squeezed weaker franchisee economics and contributed to the accelerated U.S. unit closures. Franchisee health is a linchpin of any recovery: declining royalty revenue and a rising provision for doubtful accounts in the adjusted EBITDA bridge point to collection pressure within the franchise system. Wright's plan to address franchisee economics directly will be a key signal for area development agreement holders evaluating whether to build or close. For a deeper look at how burger chains are navigating the current cost environment, see our coverage of restaurant margin pressure and commodity trends.
Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.
