Just less than a year ago, Wendy’s held an Investor Day. Two weeks ago, the company held a conference call alongside results for calendar 2025. The difference between the two events is striking.
Last March, Wendy’s management sounded bold, adventurous, and excited. The company announced plans to ramp its footprint, including the addition of roughly 300 new restaurants in the long-mature U.S. market. Meanwhile, 2028 financial targets forecast years of solid same-restaurant sales growth, improved profit margins, and better execution driven by restaurant-level data.
The recent fourth quarter earnings call, however, was completely different. This is true simply in terms of personnel: CEO Kirk Tanner, who led the Investor Day event, departed for The Hershey Company in July. But it’s obviously true in tone, as well.
Wendy’s Bets on “Back‑to‑Basics” Turnaround
Tanner opened his presentation in March 2025 by telling attendees that he was “incredibly excited about the growth opportunities for [Wendy’s] ahead.” His interim replacement, Ken Cook (who served as CFO under Tanner) said near the beginning of his prepared remarks last week that “we know that we have a lot of work to do to improve performance.”
Tanner looked forward with optimism: Cook, meanwhile, had no choice but to acknowledge his company’s difficult present.
It’s not hard to see why. The fourth quarter numbers in the U.S. were disastrous, with same-restaurant sales down 11.3%. This appears to be the chain’s worst domestic performance in at least two decades. And while the external environment is difficult, and Wendy’s did have better results in the fourth quarter of 2024, the performance over two years highlights how far behind Wendy’s has fallen of late. Between Q4 2023 and Q4 2025, McDonald’s grew its American same-restaurant sales about 5%, and Burger King a little over 4%. Wendy’s is down nearly 8%.
As with all turnarounds, the core question is whether performance can be improved by simple operational improvements, or if there are broader factors at play. Unsurprisingly, Cook gave the former explanation, saying on the Q4 call that “We got away from what made us great. We allowed [operations] to drift, and we focused too much on sales overnight and discounting versus brand over time [marketing].”
The message from Q4 is that Wendy’s will get back to basics, particularly around in-restaurant execution.
The plans to increase the chain’s footprint have been reversed: Wendy’s now plans to close 5% to 6% of its U.S. stores, and will redirect funds targeted for new restaurants into operational improvements.
A new, more permanent, value menu should help; so should the results of a huge “segmentation study” which aimed to understand which consumers visit Wendy’s, how often, and why. With better execution, management expects the turnaround to begin boosting same-restaurant sales this year, with further improvements expected in the coming years.
Falling Further Behind McDonald’s
There’s likely some truth to the argument that poor execution is at play. Wendy’s noted that same-restaurant sales in company-owned U.S. locations were more than three percentage points better than those of its franchised outlets, suggesting uneven performance among its franchisees. The company’s largest franchisee, Meritage Hospitality Group, is publicly traded, and disclosed a 5% decline in same-store sales during the first nine months of 2025, about two points worse than the rest of the chain (full-year results on that metric haven’t been released).
While Meritage blamed bad Q1 weather for part of the decline, ostensibly, getting rid of underperforming locations and working more closely with franchisees to improve operations should allow Wendy’s to reverse sales declines.
But executives almost always believe the problem with their business is fixable, and that they have the ability to be the fixer. (Without that self-belief, they likely would not have risen the ranks in the first place.) And it might not be a coincidence that history is repeating here.
The last time Wendy’s stock plunged was during the financial crisis – but unlike most of the market, it took years for the stock, and the business, to rebound. The company’s turnaround moved in fits and starts across the early 2010s before finally gaining some traction toward the middle of the decade.
In the context of that history, it’s not hard to wonder if the problem with the Wendy’s business and brand is that neither are quite strong enough to weather truly challenging external environments. (To be sure, 2026 is not 2009, but for certain segments of the market it’s far closer than headline economic and stock market news would suggest.) The comparison to the company’s biggest rival suggests that indeed might be the case.
In mid-2024, McDonald’s CEO Chris Kempczinski publicly admitted that his company had lost its leadership in value. The chain promptly rolled out $5 value menus and then brought back its Extra Value Meals. Though those meals had been off the menu for years, the historical association of McDonald’s with value pricing (and those meals) was strong enough that customers responded almost instantly. McDonald’s U.S. same-restaurant sales improved steadily across 2025 and its stock sits at an all-time high.
Wendy’s Rebrand Reset
Wendy’s simply doesn’t have that same association with value as McDonald’s; indeed, it hasn’t historically tried to create that association. Its marketing historically has centered on the quality of its products, a communication which simply just may work better when people are not quite watching every dollar they spend. In those environments, it’s always more difficult being the smaller player: Wendy’s U.S. system-wide sales are about one-fifth those of McDonald’s, and in most industries size becomes a larger advantage when times get tough. Add to that potential challenges in terms of franchisee acquisition (bigger and better concepts presumably should get the better operators, though not always) and it does seem plausible that Wendy’s intrinsically is more likely to struggle when times get tough.
If that’s the case, the marked reversal in tone and strategy from Wendy’s over the past year is a step in the right direction, but won’t necessarily lead to the turnaround executives are hoping for. Rather, it may just be that decades of positioning as the higher-quality option in fast food works when consumers will consider paying for quality, and fails when their focus turns squarely to price.
About the author: Vince Martin is an analyst and author whose work has appeared on multiple financial industry websites for more than a decade; he’s currently the lead writer for Wall Street & Main. As of this writing, he has no positions in any companies mentioned.
