Wendy's Bets on 'Project Fresh' as Investors Await Critical 2026 Outlook

DUBLIN, Ohio – January 15, 2026 – The Wendy's Company is gearing up for a pivotal moment as it prepares to release its fourth-quarter and full-year 2025 financial results on February 13. While the announcement is a routine part of the corporate calendar, this year's report carries immense weight for investors, franchisees, and customers alike. All eyes will be on the company's 2026 financial outlook, which will serve as the first major scorecard for its sweeping strategic overhaul, dubbed "Project Fresh."

After a turbulent 2025 marked by declining domestic sales and a stock that lost nearly half its value, the fast-food giant is under pressure to prove it can navigate a challenging consumer environment and intense competition. The upcoming earnings call will provide crucial insights into whether its new strategy—focused on digital innovation, international expansion, and a painful but necessary culling of underperforming U.S. locations—is poised to deliver a turnaround.

A Year of Contrasting Fortunes

A review of Wendy's performance throughout 2025 reveals a company grappling with a significant divergence between its domestic and international operations. While international markets have been a consistent bright spot, with systemwide sales growing by 8.9% in Q1, 8.7% in Q2, and 8.6% in Q3, the story at home has been far more troubling. U.S. same-restaurant sales saw declines of 2.8%, 3.6%, and a steep 4.7% across the first three quarters, respectively.

This domestic slowdown forced Wendy's to repeatedly revise its full-year guidance downwards. As of its third-quarter report, the company projected global systemwide sales to fall between 3% and 5% for the full year, a stark contrast to the 3.1% growth achieved in 2024. Similarly, its adjusted earnings per share (EPS) forecast was trimmed to a range of $0.82 to $0.89. While the company has consistently managed to beat analyst EPS forecasts in recent quarters, the underlying revenue weakness and domestic traffic issues have spooked the market.

Investors will be scrutinizing the Q4 results for any sign that the negative trend in the U.S. is bottoming out. Key metrics to watch will include same-restaurant sales, customer traffic, and the performance of recent menu additions. The report will set the baseline against which the success of its new strategic direction will be measured.

'Project Fresh': A Painful Path to Profitability

In response to these challenges, Wendy's unveiled "Project Fresh" on October 9, 2025—a comprehensive plan to revitalize the brand and bolster profitability. A central and controversial pillar of this strategy involves closing a "mid-single digit percentage" of its U.S. restaurants, a move that could shutter between 200 and 350 locations starting in late 2025 and continuing into 2026.

Company leadership has framed the closures not as a retreat, but as a strategic pruning designed to strengthen the overall health of its franchise system. The goal is to eliminate underperforming units that are a financial drag on franchisees and detract from the brand's image. The capital saved from this optimization, including a reduction in the company's Build-to-Suit development program, is being reallocated toward technology and marketing initiatives aimed at driving long-term growth.

This move directly impacts the vast network of franchisees who operate the majority of Wendy's more than 7,000 global restaurants. While the closures will be difficult for those affected, the broader aim is to create a more profitable and resilient system, potentially leading to a better customer experience, more competitive menu pricing, and renewed investment in the remaining stores.

Doubling Down on Digital and Global Frontiers

While trimming its U.S. footprint, Wendy's is simultaneously planting its flag in new territories and digital frontiers. International expansion remains the company's most powerful growth engine. In 2025, Wendy's signed major development agreements to open 170 restaurants in Italy and 20 in Armenia, with plans to enter Ireland as well. This aggressive push is part of a larger goal to operate 2,000 international restaurants by 2028, with approximately 70% of all new unit growth expected to occur outside the United States.

Technology is the other key pillar of the company's future. Wendy's is investing heavily in its AI-powered drive-thru system, "FreshAi," developed with Google Cloud. After successful pilots, the system is slated for an expanded rollout to hundreds of locations, promising to increase order accuracy, improve speed, and free up employees to focus on food quality and customer service. Early results have reportedly shown an increase in the average check size. This, combined with investments in self-order kiosks and a revamped mobile app, is central to competing in a fast-food landscape increasingly defined by digital convenience.

Navigating a Crowded and Cautious Market

Wendy's strategic pivot is not happening in a vacuum. The entire quick-service restaurant industry is wrestling with persistent inflation, rising labor costs, and a value-conscious consumer base. Even industry titan McDonald's has acknowledged that these economic pressures will likely continue well into 2026. In this environment, value is paramount. Wendy's planned 2026 launch of a new tiered "Biggie Deals" menu is a direct response to this trend, aiming to recapture budget-focused customers.

Wall Street's reaction to Wendy's predicament has been cautious. The stock (Nasdaq: WEN) has significantly underperformed the broader market, and while some analysts see a potential upside if "Project Fresh" succeeds, the consensus rating remains a tentative "Hold." Financial health metrics from early 2026, including a low Altman Z-Score, have pointed to potential liquidity challenges, adding another layer of concern for investors.

The upcoming February 13 report and, more importantly, the 2026 outlook will be a critical test. The company must convince a skeptical market that its painful domestic restructuring, coupled with its ambitious bets on technology and international growth, will be enough to steer the ship back toward sustainable profitability and reclaim its competitive edge.