Restaurant Brands International on Thursday reported quarterly earnings and revenue that topped Wall Street's expectations, fueled by international sales growth at Burger King and the recovery of Tim Hortons' Canadian locations.
In the U.S., the company said same-store sales were flat at Burger King and Popeyes.
Shares of the company rose 5% in morning trading.
Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 82 cents adjusted vs. 73 cents expected
- Revenue: $1.64 billion vs. $1.57 billion expected
Net sales for the quarter rose 14% to $1.64 billion. Global same-store sales across the company's portfolio increased 9%, fueled by the performance of Tim Hortons and Burger King.
Like many of its competitors, Restaurant Brands said it raised menu prices during the quarter to help offset rising food and freight costs.
"We've been very making sure that any price increases that we take, we're taking with consumer in mind and ensuring that we don't get too far ahead of them," CEO Jose Cil said on the company's quarterly conference call.
Tim Hortons' same-store sales growth of 12.2% beat StreetAccount estimates of 8%. In Canada, the coffee chain's same-store sales rose 14.2%.
Tims, which accounts for about 60% of Restaurant Brands' revenue, has taken longer to bounce back from the pandemic, largely because of its home market's tougher restrictions. Executives credited new cold brew and food menu items, upgrades to its core menu and a collaboration with Justin Bieber for the chain's improved performance.
Hot coffee sales, however, haven't rebounded from pre-pandemic levels. North American coffee drinkers are increasingly choosing iced coffee or cold brew over hot drinks. For example, Starbucks said three quarters of its U.S. sales during its fiscal third quarter came from cold drinks.
Burger King's global same-store sales increased 10% in the quarter, topping Wall Street's expectations of 3.4%. That was driven by same-store sales growth of 18.4% outside the U.S.
But Burger King's home market's same-store sales were flat as the company works on improving order accuracy and operational efficiency to improve the chain's performance. Executive said they're planning to share more details on its turnaround strategy for Burger King's U.S. restaurants in early September.
Popeyes Louisiana Kitchen reported same-store sales growth of 1.4%, beating estimates of 0.3%. Like Burger King, Popeyes reported flat same-store sales in the U.S. The fried chicken chain has seen its growth lag in recent quarters as it faces tough comparisons to the earlier days of the pandemic, when its chicken sandwich fueled soaring sales.
Firehouse Subs, the newest addition to Restaurant Brands' portfolio, saw its same-store sales fall 1.4% in the quarter.
For the quarter, Restaurant Brands reported net income attributable to shareholders of $236 million, or 76 cents per share, down from $259 million, or 84 cents per share, a year earlier.
Excluding costs related to its acquisition of Firehouse Subs and other items, the company earned 82 cents per share.