Wendys Co

Previous wording

Wendy’s is primarily engaged in the business of operating, developing and franchising a system of distinctive quick-service restaurants serving high quality food. Wendy’s opened its first restaurant in Columbus, Ohio in 1969. Today, Wendy’s is the second largest quick-service restaurant company in the hamburger sandwich segment in the U.S. based on traffic and dollar share, and the third largest globally with 7,261 restaurants in the U.S. and 31 foreign countries and U.S. territories as of June 30, 2024.

Current wording

Wendy’s is primarily engaged in the business of operating, developing and franchising a system of distinctive quick-service restaurants serving high quality food. Wendy’s opened its first restaurant in Columbus, Ohio in 1969. Today, Wendy’s is the second largest quick-service restaurant company in the hamburger sandwich segment in the U.S. based on traffic and dollar share, and the third largest globally with 7,292 restaurants in the U.S. and 31 foreign countries and U.S. territories as of September 29, 2024.

Previous wording

The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31. All three- six-and month periods presented herein contain 13 weeks and 26 weeks, respectively. All references to years, quarters and months relate to fiscal periods rather than calendar periods.

Current wording

The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31. All three- and nine-month periods presented herein contain 13 weeks and 39 weeks, respectively. All references to years, quarters and months relate to fiscal periods rather than calendar periods.

Previous wording

As of June 30, 2024, the Wendy’s restaurant system was comprised of 7,261 restaurants, with 6,013 Wendy’s restaurants in operation in the U.S. Of the U.S. restaurants, 399 were operated by the Company and 5,614 were operated by a total of 208 franchisees. In addition, at June 30, 2024, there were 1,248 Wendy’s restaurants in operation in 31 foreign countries and U.S. territories. Of the international restaurants, 1,236 were operated by a total of 108 franchisees and 12 were operated by the Company in the United Kingdom (the “U.K.”).

Current wording

As of September 29, 2024, the Wendy’s restaurant system was comprised of 7,292 restaurants, with 6,011 Wendy’s restaurants in operation in the U.S. Of the U.S. restaurants, 398 were operated by the Company and 5,613 were operated by a total of 210 franchisees. In addition, at September 29, 2024, there were 1,281 Wendy’s restaurants in operation in 31 foreign countries and U.S. territories. Of the international restaurants, 1,268 were operated by a total of 109 franchisees and 13 were operated by the Company in the United Kingdom (the “U.K.”).

Previous wording

•Global same-restaurant sales increased 0.8%, U.S. same-restaurant sales increased 0.6% and international same-restaurant sales increased 2.5% compared with the second quarter of 2023. On a two-year basis, global same-restaurant sales increased 5.9%;

Current wording

•Global same-restaurant sales increased 0.2%, U.S. same-restaurant sales increased 0.2% and international same-restaurant sales increased 0.7% compared with the third quarter of 2023. On a two-year basis, global same-restaurant sales increased 3.0%;

Previous wording

•Global Company-operated restaurant margin was 15.8% in the second quarter of 2024, a decrease of 70 basis points compared with the second quarter of 2023; and

Current wording

•Global Company-operated restaurant margin was 15.1% in the third quarter of 2024, an increase of 10 basis points compared with the third quarter of 2023; and

Previous wording

•Global same-restaurant sales increased 0.9%, U.S. same-restaurant sales increased 0.6% and international same-restaurant sales increased 2.8% compared with the first six months of 2023. On a two-year basis, global same-restaurant sales increased 7.4%;

Current wording

•Global same-restaurant sales increased 0.7%, U.S. same-restaurant sales increased 0.5% and international same-restaurant sales increased 2.1% compared with the first nine months of 2023. On a two-year basis, global same-restaurant sales increased 5.9%;

Previous wording

•Global Company-operated restaurant margin was 15.3% in the first six months of 2024, an increase of 10 basis points compared with the first six months of 2023; and

Current wording

•Global Company-operated restaurant margin was 15.2% in the first nine months of 2024, an increase of 10 basis points compared with the first nine months of 2023; and

Previous wording

Wendy’s long-term growth opportunities include driving same-restaurant sales across all dayparts through quality differentiation, exciting menu innovation and compelling value offerings. Global same-restaurant sales increased 0.8% in the second quarter of 2024 and increased 5.9% on a two-year basis. Global same-restaurant sales increased 0.9% in the first six months of 2024 and increased 7.4% on a two-year basis. To drive same-restaurant sales across the breakfast daypart, the Company plans to fund approximately $22.0 million of incremental breakfast advertising in 2024.

Current wording

Wendy’s long-term growth opportunities include driving same-restaurant sales across all dayparts through quality differentiation, exciting menu innovation and compelling value offerings. Global same-restaurant sales increased 0.2% in the third quarter of 2024 and increased 3.0% on a two-year basis. Global same-restaurant sales increased 0.7% in the first nine months of 2024 and increased 5.9% on a two-year basis. To drive same-restaurant sales across the breakfast daypart, the Company plans to fund approximately $22.0 million of incremental breakfast advertising in 2024.

Previous wording

Wendy’s long-term growth opportunities include accelerating consumer-facing digital platforms and technologies to drive global systemwide sales. Over the past several years, the Company has invested significant resources to focus on consumer-facing technology, including activating mobile ordering via Wendy’s mobile app, launching the Wendy’s Rewards loyalty program in the U.S. and Canada and establishing delivery agreements with third-party vendors. The Company is also continuing to make digital investments and is partnering with key technology providers to help execute our digital, restaurant technology and enterprise technology initiatives and support our technology innovation and growth. During the second quarter of 2023, the Company revised its definition of digital sales to reflect our full digital portfolio by including in-restaurant mobile scans, in addition to our previously included delivery, mobile order and kiosk digital channels. The Company’s digital business has continued to grow and, under the revised definition, digital sales as a percent of global systemwide sales increased from approximately 12.7% during the first six months of 2023 to approximately 16.9% during the first six months of 2024.

Current wording

Wendy’s long-term growth opportunities include accelerating consumer-facing digital platforms and technologies to drive global systemwide sales. Over the past several years, the Company has invested significant resources to focus on consumer-facing technology, including activating mobile ordering via Wendy’s mobile app, launching the Wendy’s Rewards loyalty program in the U.S. and Canada and establishing delivery agreements with third-party vendors. The Company is also continuing to make digital investments and is partnering with key technology providers to help execute our digital, restaurant technology and enterprise technology initiatives and support our technology innovation and growth. The Company’s digital business has continued to grow and digital sales as a percent of global systemwide sales increased from approximately 12.8% during the first nine months of 2023 to approximately 17.1% during the first nine months of 2024.

Previous wording

Wendy’s long-term growth opportunities include expanding the Company’s footprint across the globe. To promote new restaurant development, the Company has provided franchisees with certain incentive programs for qualifying new restaurants, in addition to our build to suit development fund. In July 2024, Wendy’s announced a new development incentive structure in the U.S. that provides for reductions in royalty and national advertising fees for qualifying new restaurants for two, three or four years of operation based on the number of restaurants committed to under the development agreement. In addition, the Company has development agreements in place with a number of franchisees that contractually obligate such franchisees to open additional Wendy’s restaurants over a specified timeframe. During the six months ended June 30, 2024, Wendy’s added 21 net new restaurants across the system.

Current wording

Wendy’s long-term growth opportunities include expanding the Company’s footprint across the globe. To promote new restaurant development, the Company has provided franchisees with certain incentive programs for qualifying new restaurants, in addition to our build to suit development fund. In July and September 2024, Wendy’s announced a new development incentive structure in the U.S. and Canada and select international markets, respectively, that provides for reductions in royalty and national advertising fees for qualifying new restaurants for two, three or four years of operation based on the number of restaurants committed to under the development agreement. In addition, the Company has development agreements in place with a number of franchisees that contractually obligate such franchisees to open additional Wendy’s restaurants over a specified timeframe. During the nine months ended September 29, 2024, Wendy’s added 52 net new restaurants across the system.

Previous wording

In February 2023, the Board of Directors approved a plan to redesign the Company’s organizational structure to better support the execution of the Company’s long-term growth strategy by maximizing organizational efficiency and streamlining decision making (the “Organizational Redesign Plan”). As a result of the Organizational Redesign Plan, the Company held its general and administrative expense in 2023 relatively flat compared with 2022. Additionally, in January 2024, the Board of Directors announced the appointment of Kirk Tanner as the Company’s new President and Chief Executive Officer, effective February 5, 2024. Mr. Tanner succeeded Todd A. Penegor, the Company’s previous President and Chief Executive Officer, who departed from the Company in February 2024. The Company expects to incur total costs of approximately $18 million related to the Organizational Redesign Plan, including costs related to the succession of the President and Chief Executive Officer role. Of the total costs, approximately $15 million will be cash expenditures expected through 2026. Costs related to the Organizational Redesign Plan are recorded to “Reorganization and realignment costs.” During the six months ended June 30, 2024, the Company recognized costs totaling $8.0 million, which primarily included severance and related employee costs. The Company expects to incur additional costs aggregating approximately $1.2 million, comprised of (1) severance and related employee costs of approximately $0.4 million and (2) share-based compensation of approximately $0.8 million. The Company expects costs related to the Organizational Redesign Plan to continue into 2026.

Current wording

In February 2023, the Board of Directors approved a plan to redesign the Company’s organizational structure to better support the execution of the Company’s long-term growth strategy by maximizing organizational efficiency and streamlining decision making (the “Organizational Redesign Plan”). As a result of the Organizational Redesign Plan, the Company held its general and administrative expense in 2023 relatively flat compared with 2022. Additionally, in January 2024, the Board of Directors announced the appointment of Kirk Tanner as the Company’s new President and Chief Executive Officer, effective February 5, 2024. Mr. Tanner succeeded Todd A. Penegor, the Company’s previous President and Chief Executive Officer, who departed from the Company in February 2024. The Company expects to incur total costs of approximately $18 million related to the Organizational Redesign Plan, including costs related to the succession of the President and Chief Executive Officer role. Of the total costs, approximately $15 million will be cash expenditures expected through 2026. Costs related to the Organizational Redesign Plan are recorded to “Reorganization and realignment costs.” During the nine months ended September 29, 2024, the Company recognized costs totaling $8.3 million, which primarily included severance and related employee costs. The Company expects to incur additional costs aggregating approximately $0.8 million, comprised primarily of share-based compensation. The Company expects costs related to the Organizational Redesign Plan to continue into 2026.

Previous wording

The tables included throughout this Results of Operations set forth in millions the Company’s condensed consolidated results of operations for the second quarter and the first six months of 2024 and 2023.

Current wording

The tables included throughout this Results of Operations set forth in millions the Company’s condensed consolidated results of operations for the third quarter and the first nine months of 2024 and 2023.

Previous wording

(b)During the second quarter of 2024 and 2023, global systemwide sales increased 2.6% and 6.9%, respectively, U.S. systemwide sales increased 1.7% and 6.1%, respectively, and international systemwide sales increased 8.3% and 12.7%, respectively, on a constant currency basis. During the first six months of 2024 and 2023, global systemwide sales increased 2.6% and 8.4% respectively, U.S. systemwide sales increased 1.7% and 7.3%, respectively, and international systemwide sales increased 8.5% and 16.6%, respectively, on a constant currency basis.

Current wording

(b)During the third quarter of 2024 and 2023, global systemwide sales increased 1.8% and 4.8%, respectively, U.S. systemwide sales increased 0.9% and 3.6%, respectively, and international systemwide sales increased 7.7% and 13.6%, respectively, on a constant currency basis. During the first nine months of 2024 and 2023, global systemwide sales increased 2.3% and 7.2% respectively, U.S. systemwide sales increased 1.4% and 6.0%, respectively, and international systemwide sales increased 8.3% and 15.6%, respectively, on a constant currency basis.

Previous wording

The decrease in sales during the second quarter and the first six months of 2024 was primarily due to (1) a 1.3% and 1.1% decrease in global Company-operated same-restaurant sales of $3.4 million and $5.2 million, respectively, and (2) net closures of Company-operated restaurants of $0.6 million and $2.3 million, respectively. Company-operated same-restaurant sales decreased due to a decrease in customer count, partially offset by higher average check.

Current wording

The decrease in sales during the third quarter and the first nine months of 2024 was primarily due to (1) a 1.6% and 1.3% decrease in global Company-operated same-restaurant sales of $4.1 million and $9.4 million, respectively, and (2) net closures of Company-operated restaurants of $0.3 million and $2.2 million, respectively. Company-operated same-restaurant sales decreased due to a decrease in customer count, partially offset by higher average check.

Previous wording

Franchise royalty revenue during the second quarter of 2024 increased $4.2 million, of which (1) $1.7 million was due to net new restaurant development and (2) $1.5 million was due to a 1.0% increase in global franchise same-restaurant sales. Franchise royalty revenue during the first six months of 2024 increased $7.7 million, of which (1) $3.4 million was due to net new restaurant development and (2) $3.1 million was due to a 1.0% increase in global franchise same-restaurant sales. Franchise same-restaurant sales during the second quarter and first six months of 2024 increased due to higher average check, partially offset by a decrease in customer count.

Current wording

Franchise royalty revenue during the third quarter of 2024 increased $2.5 million, of which (1) $2.1 million was due to net new restaurant development and (2) $0.7 million was due to a 0.4% increase in global franchise same-restaurant sales. Franchise royalty revenue during the first nine months of 2024 increased $10.3 million, of which (1) $6.1 million was due to net new restaurant development and (2) $3.9 million was due to a 0.8% increase in global franchise same-restaurant sales. Franchise same-restaurant sales during the third quarter and first nine months of 2024 increased due to higher average check, partially offset by a decrease in customer count.

Previous wording

The increase in franchise fees during the first six months of 2024 was primarily due to (1) higher fees for providing information technology services to franchisees of $0.8 million and (2) an increase in other miscellaneous franchise fees of $0.9 million.

Current wording

The increase in franchise fees during the third quarter and the first nine months of 2024 was primarily due to (1) higher fees for providing information technology services to franchisees of $0.5 million and $1.3 million, respectively, and (2) an increase in other miscellaneous franchise fees of $1.5 million and $2.4 million, respectively.

Previous wording

The increase in franchise rental income during the second quarter and the first six months of 2024 was primarily due to amending certain existing leases and entering into new leases.

Current wording

The increase in franchise rental income during the third quarter and the first nine months of 2024 was primarily due to (1) the impact of amending certain existing leases of $1.3 million and $2.8 million, respectively, (2) the impact of entering into new leases of $0.6 million and $1.6 million, respectively, and (3) an increase in executory costs of $0.3 million and $0.7 million, respectively. See Note 11 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information.

Previous wording

The increase in advertising funds revenue during the second quarter and the first six months of 2024 was primarily due to (1) net new restaurant development of $1.7 million and $3.1 million, respectively, (2) an increase in franchise same-restaurant sales in the U.S. and Canada of $1.0 million and $1.9 million, respectively, and (3) higher other miscellaneous advertising revenues of $1.5 million and $2.0 million, respectively.

Current wording

The increase in advertising funds revenue during the third quarter of 2024 was primarily due to promotional activity of $12.0 million. During the first nine months of 2024, advertising funds revenue also increased due to (1) net new restaurant development of $4.5 million and (2) an increase in franchise same-restaurant sales in the U.S. and Canada of $2.3 million.

Previous wording

The increase in cost of sales, as a percent of sales, during the second quarter of 2024 was primarily due to (1) an increase in restaurant labor costs and (2) a decrease in customer count. These impacts were partially offset by higher average check.

Current wording

The decrease in cost of sales, as a percent of sales, during the third quarter and the first nine months of 2024 was primarily due to (1) higher average check and (2) labor efficiencies. These impacts were partially offset by (1) an increase in restaurant labor rates and (2) a decrease in customer count.

Previous wording

The increase in franchise support and other costs during the second quarter and the first six months of 2024 was primarily due to an increase in costs incurred to provide information technology and other services to franchisees.

Current wording

The increase in franchise support and other costs during the third quarter and the first nine months of 2024 was primarily due to an increase in costs incurred to provide information technology and other services to franchisees.

Previous wording

On an interim basis, advertising funds expense is recognized in proportion to advertising funds revenue. The Company expects advertising funds expense to be higher than advertising funds revenue by approximately $22.0 million for 2024, which represents the Company’s plan to fund incremental breakfast advertising. The increase in advertising funds expense during the second quarter and the first six months of 2024 was primarily due to (1) the recognition of the expected Company breakfast advertising spend in excess of advertising funds revenue of $5.7 million and $8.2 million, respectively, and (2) an increase in franchise same-restaurant sales in the U.S. and Canada.

Current wording

On an interim basis, advertising funds expense is recognized in proportion to advertising funds revenue. The Company expects advertising funds expense to be higher than advertising funds revenue by approximately $22.0 million for 2024, which represents the Company’s plan to fund incremental breakfast advertising. The increase in advertising funds expense during the third quarter and the first nine months of 2024 was primarily due to (1) the same factors as described above for “Advertising Funds Revenue” and (2) the recognition of the expected Company breakfast advertising spend in excess of advertising funds revenue of $6.6 million and $14.8 million, respectively.

Previous wording

The decrease in general and administrative expenses during the second quarter of 2024 was primarily due to (1) a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2024 versus 2023, and (2) a decrease in professional fees, primarily as a result of costs associated with the Company’s human capital management (“HCM”) system implementation completed in the third quarter of 2023. These decreases were partially offset by higher employee compensation and benefits.

Current wording

The increase in general and administrative expenses during the third quarter of 2024 was primarily due to (1) higher employee compensation and benefits and (2) an increase in professional fees. These increases were partially offset by a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2024 versus 2023.

Previous wording

The increase in general and administrative expenses during the first six months of 2024 was primarily due to (1) higher employee compensation and benefits and (2) higher share-based compensation. These increases were partially offset by (1) a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2024 versus 2023, and (2) a decrease in professional fees, primarily as a result of costs associated with the Company’s HCM system implementation completed in the third quarter of 2023.

Current wording

The increase in general and administrative expenses during the first nine months of 2024 was primarily due to (1) higher employee compensation and benefits and (2) higher share-based compensation. These increases were partially offset by a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2024 versus 2023.

Previous wording

The increase in depreciation and amortization during the second quarter and the first six months of 2024 was primarily due to (1) asset additions for new and remodeled restaurants and (2) depreciation and amortization for technology investments.

Current wording

The increase in depreciation and amortization during the third quarter and the first nine months of 2024 was primarily due to (1) asset additions for new and remodeled restaurants and (2) depreciation and amortization for technology investments.

Previous wording

The increase in amortization of cloud computing arrangements during the second quarter and the first six months of 2024 was primarily due to amortization of assets associated with the Company’s HCM system implementation completed in the third quarter of 2023.

Current wording

The increase in amortization of cloud computing arrangements during the first nine months of 2024 was primarily due to amortization of assets associated with the Company’s human capital management (“HCM”) system implementation completed in the third quarter of 2023.

Previous wording

System optimization gains, net for the second quarter and the first six months of 2024 were primarily comprised of post-closing adjustments on sales of restaurants. See Note 3 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information.

Current wording

System optimization gains, net for the third quarter and the first nine months of 2024 were primarily comprised of post-closing adjustments on sales of restaurants. See Note 3 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information.

Previous wording

The increase in reorganization and realignment costs during the second quarter and the first six months of 2024 was primarily due to higher severance and related employee costs under the Organizational Redesign Plan. See Note 4 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information on the Organizational Redesign Plan.

Current wording

During the first nine months of 2024 and 2023, the Company recognized costs under the Organizational Redesign Plan of $8.3 million and $8.0 million, respectively, which primarily included severance and related employee costs. See Note 4 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information on the Organizational Redesign Plan.

Previous wording

Costs incurred under the Company’s other reorganization and realignment plans were not material during the three and six months ended June 30, 2024 and July 2, 2023. The Company does not expect to incur any material additional costs under these plans.

Current wording

Costs incurred under the Company’s other reorganization and realignment plans were not material during the three and nine months ended September 29, 2024 and October 1, 2023. The Company does not expect to incur any material additional costs under these plans.

Previous wording

The increase in impairment of long-lived assets during the second quarter and the first six months of 2024 was primarily due to higher impairment charges as a result of the deterioration in operating performance of certain Company-operated restaurants.

Current wording

The increase in impairment of long-lived assets during the first nine months of 2024 was primarily due to higher impairment charges as a result of the deterioration in operating performance of certain Company-operated restaurants.

Previous wording

The increase in other operating income during the first six months of 2024 was primarily due to an increase in the equity in earnings from our TimWen joint venture.

Current wording

The increase in other operating income during the third quarter and the first nine months of 2024 was primarily due to an increase in lease buyout activity.

Previous wording

The decrease in interest expense, net during the second quarter and the first six months of 2024 was primarily due to lower outstanding long-term debt.

Current wording

The decrease in interest expense, net during the first nine months of 2024 was primarily due to lower outstanding long-term debt.

Previous wording

During the first quarter of 2023, the Company incurred a loss on early extinguishment of debt of $1.3 million related to the repurchase of $31.6 million in principal of the Company’s 7% debentures.

Current wording

During the first nine months of 2023, the Company incurred a loss on early extinguishment of debt of $1.6 million related to the repurchase of $39.3 million in principal of the Company’s 7% debentures.

Previous wording

During the second quarter and the first six months of 2023, the Company recorded a loss of $6.8 million and $10.4 million, respectively, due to impairment charges for the difference between the estimated fair value and the carrying value of an investment in equity securities.

Current wording

During the first nine months of 2023, the Company recorded a loss of $10.4 million due to impairment charges for the difference between the estimated fair value and the carrying value of an investment in equity securities.

Previous wording

The decrease in other income, net during the second quarter and the first six months of 2024 was primarily due to a decrease in interest income, reflecting lower balances of cash equivalents.

Current wording

The decrease in other income, net during the third quarter and the first nine months of 2024 was primarily due to a decrease in interest income, reflecting lower balances of cash equivalents.

Previous wording

Our effective tax rates for the second quarter and the first six months of 2024 and 2023 were impacted by variations in income before income taxes, adjusted for recurring items such as non-deductible expenses and state income taxes, as well as non-recurring discrete items. The increase in the effective tax rate for the second quarter and the first six months of 2024 was primarily due to (1) an increase in the tax effects of our foreign operations, (2) a decrease in the benefit from share-based compensation and (3) lower net income from our national advertising funds, which are not subject to tax. During the first six months of 2024, these changes were partially offset by a one-time adjustment to our foreign deferred income taxes related to prior periods.

Current wording

The effective tax rates for the third quarter and the first nine months of 2024 and 2023 were impacted by variations in income before income taxes, adjusted for recurring items such as non-deductible expenses and state income taxes, as well as non-recurring discrete items. The increase in the effective tax rate for the third quarter of 2024 was primarily due to (1) an increase in the tax effects of our foreign operations, (2) a decrease in the benefit from share-based compensation and (3) an increase in state income taxes, including discrete changes to state deferred income taxes. The increase in the effective tax rate for the first nine months of 2024 was primarily due to (1) an increase in the tax effects of our foreign operations and (2) a decrease in the benefit from share-based compensation. These changes were partially offset by a one-time adjustment to our foreign deferred income taxes related to prior periods.

Previous wording

The increase in Wendy’s U.S. revenues during the second quarter and the first six months of 2024 was primarily due to (1) net new franchise restaurant development and (2) an increase in franchise same-restaurant sales. Franchise same-restaurant sales increased during the second quarter and the first six months of 2024 primarily due to higher average check, partially offset by a decrease in customer count. These increases were partially offset by a decrease in Company-operated sales driven by the same factors as described above for “Sales.”

Current wording

The increase in Wendy’s U.S. revenues during the third quarter and the first nine months of 2024 was primarily due to (1) higher advertising fund revenue and (2) net new franchise restaurant development. During the first nine months of 2024, revenues also increased due to higher franchise same-restaurant sales. Franchise same-restaurant sales increased during the first nine months of 2024 primarily due to higher average check, partially offset by a decrease in customer count. These increases were partially offset by a decrease in Company-operated sales driven by the same factors as described above for “Sales.”

Previous wording

The decrease in Wendy’s U.S. segment profit during the second quarter and the first six months of 2024 was primarily due to (1) an increase in the Company’s funding of incremental advertising, (2) a decrease in Company-operated sales and (3) higher franchise support and other costs. These changes were partially offset by an increase in franchise royalty revenue and fees.

Current wording

The decrease in Wendy’s U.S. segment profit during the third quarter and the first nine months of 2024 was primarily due to (1) an increase in the Company’s funding of incremental advertising and (2) a decrease in Company-operated sales. During the first nine months of 2024, segment profit also decreased due to higher franchise support and other costs. These changes were partially offset by an increase in franchise royalty revenue and fees.

Previous wording

The increase in Wendy’s International revenues during the second quarter and the first six months of 2024 was primarily due to (1) an increase in franchise same-restaurant sales and (2) net new restaurant development. Franchise same-restaurant sales increased during the second quarter and the first six months of 2024 due to higher average check, partially offset by a decrease in customer count.

Current wording

The increase in Wendy’s International revenues during the third quarter and the first nine months of 2024 was primarily due to (1) net new restaurant development and (2) an increase in franchise same-restaurant sales. Franchise same-restaurant sales increased during the third quarter and the first nine months of 2024 due to higher average check, partially offset by a decrease in customer count.

Previous wording

The increase in Wendy’s International segment profit during the second quarter and the first six months of 2024 was primarily due to higher revenues. This increase was partially offset by higher franchise support and other costs.

Current wording

The increase in Wendy’s International segment profit during the third quarter and the first nine months of 2024 was primarily due to higher revenues. This increase was partially offset by higher advertising fund expenses.

Previous wording

The increase in Global Real Estate & Development revenues during the second quarter and the first six months of 2024 was primarily due to higher franchise rental income as a result of (1) amending certain existing leases and entering into new leases and (2) increases in percent rent and executory costs. These increases were partially offset by lower development-related fees.

Current wording

The increase in Global Real Estate & Development revenues during the third quarter and the first nine months of 2024 was primarily due to higher franchise rental income as a result of (1) amending certain existing leases, (2) entering into new leases and (3) an increase executory costs.