Wendy’s (NASDAQ:WEN) Exceeds Q4 CY2025 Expectations But Stock Drops

Wendy’s (NASDAQ:WEN) Exceeds Q4 CY2025 Expectations But Stock Drops

Anthony Lee

Fri, February 13, 2026 at 9:21 PM GMT+9 4 min read

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WEN

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Fast-food chain Wendy’s (NASDAQ:WEN) reported Q4 CY2025 results exceeding the market’s revenue expectations , but sales fell by 5.5% year on year to $543 million. Its non-GAAP profit of $0.16 per share was 10.4% above analysts’ consensus estimates.

Is now the time to buy Wendy’s? Find out in our full research report.

Wendy’s (WEN) Q4 CY2025 Highlights:

**Revenue:** $543 million vs analyst estimates of $536.3 million (5.5% year-on-year decline, 1.3% beat)

**Adjusted EPS:** $0.16 vs analyst estimates of $0.14 (10.4% beat)

**Adjusted EBITDA:** $113.3 million vs analyst estimates of $112.6 million (20.9% margin, 0.6% beat)

**Adjusted EPS guidance for the upcoming financial year 2026** is $0.58 at the midpoint, missing analyst estimates by 32%

**EBITDA guidance for the upcoming financial year 2026** is $470 million at the midpoint, below analyst estimates of $516.8 million

**Operating Margin:** 11.8%, down from 16.7% in the same quarter last year

**Free Cash Flow Margin:** 5.8%, up from 4.6% in the same quarter last year

**Same-Store Sales** fell 10.1% year on year (4.3% in the same quarter last year)

**Market Capitalization:** $1.38 billion

Company Overview

Founded by Dave Thomas in 1969, Wendy’s (NASDAQ:WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $2.18 billion in revenue over the past 12 months, Wendy’s is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.

As you can see below, Wendy’s sales grew at a sluggish 4.1% compounded annual growth rate over the last six years.

Wendy’s Quarterly Revenue

This quarter, Wendy’s revenue fell by 5.5% year on year to $543 million but beat Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to grow 2.9% over the next 12 months, similar to its six-year rate. This projection is underwhelming and implies its menu offerings will face some demand challenges.

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Restaurant Performance

Number of Restaurants

Over the last two years, Wendy’s has generally opened new restaurants, averaging 1.3% annual growth. This was faster than the broader restaurant sector.

When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.

Note that Wendy’s reports its restaurant count intermittently, so some data points are missing in the chart below.

Wendy’s Operating Locations

Same-Store Sales

A company’s restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.

Wendy’s demand has been shrinking over the last two years as its same-store sales have averaged 1.6% annual declines. This performance is concerning - it shows Wendy’s artificially boosts its revenue by building new restaurants. We’d like to see a company’s same-store sales rise before it takes on the costly, capital-intensive endeavor of expanding its restaurant base.

Wendy’s Same-Store Sales Growth

In the latest quarter, Wendy’s same-store sales fell by 10.1% year on year. This decrease represents a further deceleration from its historical levels. We hope the business can get back on track.

Key Takeaways from Wendy’s Q4 Results

It was good to see Wendy’s narrowly top analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its full-year EBITDA guidance missed and its same-store sales fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 8.1% to $6.68 immediately following the results.

Wendy’s didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.

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