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Wendy's faces shrinking sales as US same-store declines persist
Wendy's reported six straight quarters of same-store sales declines, with US same-restaurant sales down 7% in the second quarter and adjusted operating profits falling 13.2% year over year.
Wendy's is confronting a prolonged downturn as the company logged six straight quarters of same-store sales declines, according to an analysis by Yahoo Finance AlphaSpace. In the US, same-restaurant sales fell 7% in the second quarter, compared with a 2.3% decline a year earlier, while adjusted operating profits dropped 13.2% year over year.
Results this year have also been shaped by management changes, including the return of former Wendy's executive Bob Wright as CEO. The company said 289 US locations closed during the first half of the year, a step Wright linked to pressures facing franchisees amid the sales declines.
Wright told analysts that franchisee health is under pressure because weaker sales feed into restaurant profitability, creating fragility in the system. He also said the company plans a more targeted approach to closures and will support franchisees if they need help.
The competitive backdrop adds pressure, with Burger King promising higher-quality burgers and McDonald's revamping its value menu. Yahoo Finance also cited Bernstein analyst Danilo Gargiulo saying investors are likely to wait for the next update that provides a quantified plan, amid leadership and capital allocation overhang concerns flagged over the past year.