The quarter was slightly better on adjusted EPS but weaker on revenue. Adjusted diluted EPS was $0.46 versus a published consensus of roughly $0.45, while revenue was $482.4 million versus roughly $491.3 million expected—an earnings-quality near-miss rather than a clean beat.
| Metric | Q2 2026 | Q2 2025 | Change / expectation |
|---|---|---|---|
| Total revenue | $482.4 million | $529.2 million | Down 8.8%; below published consensus (~$491.3 million) |
| Net income | $8.7 million | $9.7 million | Down 10.0% |
| Adjusted EBITDA | $52.7 million | $52.6 million | Up 0.2% |
| Diluted EPS | $0.24 | $0.28 | Down $0.04 |
| Adjusted diluted EPS | $0.46 | $0.41 | Up $0.05; slightly above published consensus (~$0.45) |
| Free cash flow, six months | $9.5 million | $36.5 million | Down $27.1 million |
| North America comparable sales | Down 8.3% | Up 0.9% | Well below prior outlook of down 2% to 4% |
| International comparable sales | Up 1.5% | Up 3.7% | Within revised outlook; below prior outlook of up 2% to 4% |
The core operating problem is much worse than the headline adjusted EPS suggests. North America comparable sales fell 8.3%, with domestic company-owned restaurants down 8.9% and franchised restaurants down 8.2% (Comparable sales table). Global system-wide sales fell 4.8%, while North America system-wide sales declined 8% (System-wide sales commentary). International remained a relative bright spot, with comparable sales up 1.5% and adjusted EBITDA rising to $7.4 million from $5.6 million (Segment results — International), but that improvement was not enough to offset the North American deterioration.
The unchanged adjusted EBITDA masks a weaker demand environment. Consolidated adjusted EBITDA was essentially flat at $52.7 million versus $52.6 million last year (Financial Highlights), despite the benefit of lower G&A, lower interest expense, supply-chain savings, and the prior-year comparison being affected by refranchising. North America franchising adjusted EBITDA fell to $23.7 million from $26.8 million, while domestic company-owned restaurant adjusted EBITDA dropped to $6.6 million from $9.9 million (Segment results — North America). That means cost savings are cushioning, not reversing, the sales decline.
Management materially reset the full-year outlook. Adjusted EBITDA guidance fell to $180 million–$190 million from $200 million–$210 million, while North America comparable-sales guidance worsened to down 6%–8% from down 2%–4% and international comparable-sales guidance narrowed to up 1%–3% from up 2%–4% (2026 Outlook). The unchanged opening and capital-expenditure targets do not offset the significance of the earnings reset: the company now expects a materially lower profit base while continuing to invest in the transformation.
The dividend suspension is a clear sign that investment needs and cash-flow pressure have overtaken shareholder returns. The Board suspended the quarterly dividend beginning with the third quarter of 2026 to fund customer acquisition, franchisee incentives, technology, and restaurant improvements (Capital Allocation; Dividend Suspension). Six-month free cash flow fell to $9.5 million from $36.5 million, while cash declined to $28.5 million from $37.0 million and long-term debt increased modestly to $727.5 million including the current portion (Cash Flow statement; Balance Sheet). Net, the filing is significantly worse than expected: a marginal adjusted-EPS beat is outweighed by the revenue miss, sharp North American sales deterioration, lower guidance, weak cash conversion, and dividend removal.
Read the original 8-K on SEC EDGAR ↗