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Bear of the Day: The Wendy's Company (WEN)

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Key Takeaways

  • WEN's earnings estimates have tanked over the last few years.
  • The stock has dropped 53% over the past five years, while its industry jumped 27%.

The Wendy's Company (WEN - Free Report)  stock has tanked over the last few years as its earnings outlook plummets amid an array of headwinds.

Why Investors Should Stay Away From WEN Stock

Wendy's is a fast-food chain renowned for its square hamburgers. The company, which was founded back in 1969 by Dave Thomas, remains committed to making its food fresh to order.

WEN operates across more than 7,000 restaurants worldwide, competing against the likes of McDonald's (MCD - Free Report)  and Burger King. The burger chain remains a standout in the larger restaurant industry, but its struggles are growing amid changing consumer habits and more.

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Consumers have more options than ever before, and more people are trying to eat healthier. On top of that, fast-casual giants like Chipotle and casual titan Chili’s are gaining momentum.

Wendy’s is suffering as its same-restaurant sales fade in 2025, driven by reduced customer traffic. Plus, rising commodity prices and labor costs remain significant headwinds.

WEN’s earnings estimates dropped again following its disappointing Q2 release on August 8.

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WEN’s adjusted consensus earnings per share (EPS) estimates have fallen 16% for Q3, 21% for Q4, and 8% for fiscal 2026. Its negative earnings revisions earn the stock a Zacks Rank #5 (Strong Sell) and extend a downward spiral that began several years ago.

The burger company’s adjusted earnings are projected to fall 11% YoY on 3.4% lower sales. And its Retail – Restaurants industry sits in the bottom 19% of roughly 250 Zacks industries.

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WEN stock has tumbled 37% in 2025, lagging far behind its industry’s -3% drop and McDonald's +8% jump. This is part of a 53% decline over the past five years, while its industry jumped 27% and MCD surged 48%. Therefore, it might be best for investors interested in the restaurant business to look elsewhere. 


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