Wendy’s: A Most Unappetizing Turnaround?

One does rather tire of these corporate rescue attempts, don’t you think? Wendy’s, it seems, is currently engaged in what they’re calling “Project Fresh.” A terribly optimistic name, considering the stock has been performing with the enthusiasm of a damp squib for some time. Earnings are due on the 13th, and naturally, everyone is in a flutter. Last quarter’s numbers – a 2.6% dip in global sales and a 4% tumble in adjusted earnings per share – were, shall we say, less than sparkling.

The decline began, oh, late 2024, and has continued with a depressing regularity. The stock is down nearly 46% over the last twelve months. For the optimists, naturally, this presents an ‘opportunity.’ Trading at a forward P/E of around 9 and a price-to-sales ratio well under 1, it’s cheap, certainly. Though one wonders if ‘cheap’ is always synonymous with ‘wise.’ It’s hovering just above its 52-week low as of February 9th. A rather precarious position, wouldn’t you agree?

The entire fast-food sector has been rather glum since the pandemic, what with the regrettable decline in foot traffic and the persistent enthusiasm for working from home. One suspects the days of the spontaneous lunchtime burger are sadly numbered.

Wendy’s plan, as these things always are, is built on pillars. Four of them, in fact: brand revitalization, system optimization, operational excellence, and capital allocation. Terribly impressive terminology. They’ve added energy drinks – one assumes to counteract the general malaise – revamped the coffee, and are leaning heavily into chicken tenders. Apparently, lower-income consumers are proving a trifle difficult. One can’t expect miracles, darling. And they’re contemplating closing up to 300 franchises in the U.S. A rather drastic measure, but then, desperation rarely leads to subtlety.

Frankly, I’m skeptical. Or, at least, I suspect any real improvement is some way off. Company executives are, naturally, hopeful. But hope, as a financial strategy, is notoriously unreliable. There’s only so much Wendy’s can control. If the wallets of the less affluent continue to resemble empty handbags, the comeback will be…challenging. One rather suspects it will be. A pity, really. Though one does wonder if a slightly better burger might have prevented the entire debacle. Just a thought.

2026-02-13 00:12

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