Burger King parent earnings beat estimates as revenue climbs 15%
- Restaurant Brands International reported results that beat expectations, fueled by strong same-store sales growth from Burger King's overseas restaurants.
- Net sales rose 15.2% to $1.45 billion, beating expectations of $1.41 billion.
Restaurant Brands International on Tuesday reported quarterly earnings and revenue that beat analysts' expectations, fueled by strong same-store sales growth from Burger King's overseas restaurants.
The burger chain's international same-store sales soared 20.1% in the first quarter, but in its home market they were flat as the chain embarks on a turnaround to rejuvenate demand. Worldwide, Burger King saw its same-store sales climb 10.3% in the quarter.
Burger King is Restaurant Brands' only chain to have restaurants in Russia, through a joint venture where it owns a 15% stake. The company has previously said it's looking to divest its interest in the joint venture, and said Tuesday the decision to suspend all corporate support for those locations had a "measurable, but not material" impact on its results this quarter.
Burger King's Russian restaurants accounted for just 0.6% of the company's total revenue last year. Those locations dragged down its adjusted earnings before interest, taxes, depreciation and amortization by about $12 million during the first quarter. Rival McDonald's, on the other hand, reported $127 million in charges related to its Russian business for the first quarter.
Here's what Restaurant Brands reported for the quarter, compared with what Wall Street was expecting based on a survey of analysts by Refinitiv:
- Earnings per share: 64 cents adjusted vs. 63 cents expected
- Revenue: $1.45 billion vs. $1.41 billion expected
Restaurant Brands reported first-quarter net income of $270 million, or 59 cents per share, down from $271 million, or 58 cents per share, a year earlier.
Excluding items, the company earned 64 cents per share, topping the 63 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 15.2% to $1.45 billion during the period, beating expectations of $1.41 billion.
This marked the first full quarter that Restaurant Brands' acquisition of Firehouse Subs was included in its revenue. The sandwich chain saw same-store sales growth of 4.2% in the quarter. In the U.S., its same-store sales rose 4.5%.
The company's Tim Hortons chain reported same-store sales growth of 8.4% for the quarter, which includes double-digit gains in Canada. The coffee chain has taken longer than Restaurant Brands' other eateries to bounce back from the Covid pandemic because of its home market's restrictions. A year ago, its same-store sales shrank by 2.3%.
Popeyes Louisiana Kitchen was once again the only chain in Restaurant Brands' portfolio to report same-store sales declines. Worldwide, same-store sales shrank by 3%. However, the fried chicken chain also reported net restaurant growth of 7.9%. Only locations that have been open at least 13 months are included in its same-store sales metrics.
CEO Jose Cil said in a statement that home market digital sales reached their highest levels ever during the first quarter. The company does not disclose how much of its systemwide sales come from digital channels, although its digital sales reached $10 billion in 2021.