Wendy's Withdraws Outlook, Slashes Dividend as Turnaround Struggles to Take Hold -- Update

By Connor Hart

Wendy's withdrew its outlook and slashed its quarterly dividend, as the company's turnaround struggles to pick up steam.

"We are not performing at our potential," Chief Executive Bob Wright said on a call with analysts Friday. "Our quality differentiation has eroded, our value proposition has weakened, and we have not consistently delivered the experience customers expect from Wendy's."

Wright returned to the fast-food chain earlier this year, becoming its third top executive in as many years. In the role, he will helm a turnaround that aims to improve the company's reputation and attract new customers, after operational missteps in recent years have weighed on traffic and pressured earnings.

Wendy's reported a 7% drop in same-restaurant sales in the U.S. during the latest quarter, which drove a 6.5% decrease in overall systemwide sales. Traffic trends came under pressure during the period, after the company pulled back on discounting and reduced or eliminated breakfast hours at certain restaurants.

More broadly, Wendy's has turned off customers in recent years by becoming overly reliant on one-off promotions and collaborations, Wright said. The company has also allowed cost and efficiency concerns to drive its decision-making, which has eroded the chain's quality and weakened its value proposition, he added.

"It's going to take time, but these issues are within our control," Wright said.

In an effort to boost sales, Wendy's will rebuild its menu to offer more compelling value, as well as step up its marketing efforts. At the same time, the company will invest in its operations, digital capabilities and physical restaurants.

Wendy's slashed its quarterly dividend in half, to 7 cents a share, to help fund these investments. The company also pulled its guidance for the year, a move Chief Financial Officer Steve Cirulis said will allow the company's new leadership team time to fully assess the business and its opportunities.

Despite not providing an outlook, Cirulis said traffic trends in July were similar to those of the second quarter. "As a result, we expect continued traffic headwinds to impact our ability to return to year-over-year systemwide sales growth in either the third or fourth quarter," he said.

Wright said he expects to share a full strategic turnaround plan with investors by the company's next quarterly update, and he noted that he has already begun looking into various restructuring and reorganization efforts.

"We're in the early stages of this work, and meaningful change won't happen overnight," he said.

The updates came as Wendy's reported net income of $32.6 million, or 17 cents a share, for its three months ended June 28, down from $55.1 million, or 29 cents a share, in last year's comparable quarter. On an adjusted basis, earnings of 18 cents a share topped analyst expectations for 16 cents a share, according to FactSet.

Revenue ticked up 1.7% to $570.6 million, topping Wall Street models for $557.1 million.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

August 07, 2026 10:20 ET (14:20 GMT)