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Struggling Wendy’s (WEN) is banking on a revamped spicy chicken sandwich to reverse its stretch of awful financial results and dreadful returns to investors.
The restaurant chain will face a revived Burger King slinging hotter Whoppers with fluffier buns, a McDonald’s (MCD) handing out aggressive new deals to diners, and places like Chick-fil-A dominating the chicken category.
And to add insult to injury, the chicken sandwich competition is so five years ago!
“Wendy’s has served spicy chicken sandwiches since 1995, and they’re an important part of our brand legacy,” Wendy’s CFO and interim CEO Ken Cook said on an earnings call last week. “To reestablish their popularity, we’ve modernized this fan favorite with the most significant quality upgrade in its history, which we rolled out at the end of the first quarter.”
According to Cook, the upgrade includes a new marinade, a crispy panko-style breading, and a new bun and toppings.
Cook promised Wendy’s is “strengthening our innovation pipeline with a rigorous screening of ideas, a more robust testing process and more in market trials.”
A pretzel bacon pub cheeseburger was teased for release later this year.
Wendy’s performance at a glance: Abysmal doesn’t capture the essence of Wendy’s last few earnings reports. This year, first quarter US same-store sales tanked 7.8%, following a 11.3% plunge in the fourth quarter of 2025.
The stock has declined 40% in the past year and is down 68% in the past five years. The company’s market cap is a paltry $1.39 billion. For perspective, Shake Shack (SHAK) has a market cap of $3 billion with only 555 restaurants worldwide. Wendy’s has more than 7,200 restaurants worldwide.
McDonald’s market cap stands at $195 billion.
Wendy’s hasn’t made Cook its permanent CEO. He was handed the job in July 2025 after Kirk Tanner abruptly decamped to Hershey’s (HSY) to be its CEO. The lack of that permanent CEO title could be partially weighing on Wendy’s execution, from corporate to franchisee owners. Cook moving forward with hundreds of store closures probably hasn’t aided morale either.
There are also concerns about who controls Wendy’s in the future.
Former longtime chairman Nelson Peltz and his Trian Fund Management disclosed in an SEC filing in February that they’re reviewing strategic alternatives for the burger slinger. That includes the possibility of gaining full control and taking the company private. Trian, Wendy’s largest shareholder, with a 16% stake, said the stock is “undervalued.” It has already held discussions with potential financing sources, co-investors, and strategic partners.
“We see reasons for Wendy’s US same-store sales trends to stabilize through the year. That said, we worry about the financial health of the Wendy's system (company and franchisees) without improving trends this year,” Evercore ISI analyst David Palmer warned in a note.
The fast food industry has blown Wendy’s away: Restaurant Brands (QSR) said last week its Burger King US chain delivered a 5.8% same-store sales increase in the first quarter. The result outperformed the quick-service restaurant industry by more than five points, Bernstein analyst Danilo Gargiulo said.
It also bested McDonald’s — its US business posted a same-store sales increase of 3.9% in the first quarter on Thursday.
“It’s a zero-sum game. It’s not a growing category,” Curtis said. “But we’ve proven to ourselves that if you do offer a better experience and a better core product, you can absolutely grow.”
Elsewhere, Yum Brands (YUM)-owned Taco Bell saw same-store sales rise 8%, while Domino’s Pizza (DPZ) notched a 0.9% increase.
Bottom line: Wendy’s is in big trouble. And for the sake of its long-suffering shareholders, the C-suite better have more up its sleeve than a better spicy chicken sandwich bun.
Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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