A general view of a Tim Hortons Drive-Thru cafe and restaurant at Lakeside Retail Park on February 5, 2024 in Grays, United Kingdom.
John Keeble | Getty Images
International restaurant brands On Thursday, it reported quarterly revenue that beat analysts' expectations, boosted by better-than-expected sales at Tim Hortons and the company's international restaurants.
“We were certainly planning for better absolute gross results,” CEO Josh Kobza told analysts on the company's conference call. “However, relative to our overall industry performance, we have continued to outperform key competitors in some of our largest markets.”
Restaurant Brands shares rose 3% in morning trading.
Here's what the company reported compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: 86 cents adjusted versus 87 cents expected
- Revenue: $2.08 billion versus the expected $2.02 billion
Restaurant Brands reported second-quarter net income of $399 million, or 88 cents per share, up from $351 million, or 77 cents per share, a year earlier.
Excluding extraordinary items, the company earned 86 cents per share.
Net sales rose 17% to $2.08 billion, boosted by recent acquisitions of Burger King restaurants in the U.S. The company's same-store sales rose 1.9%.
Of the four Restaurant Brands chains, Tim Hortons was the best performer, with same-store sales growth of 4.6%. Tim's efforts to attract more customers in the afternoon, such as the launch of flatbread pizzas, have boosted sales. The chain has also been trying to expand beyond hot coffee by adding more cold-brew coffee drinks and launching Infusr energy drinks.
Popeyes' same-store sales rose 0.5%. Its new boneless wings have been a hit with existing customers, but the chain hopes to attract new customers to the brand with the menu item and the right advertising strategy.
Both Burger King and Firehouse Subs reported same-store sales declines of 0.1% for the quarter.
“Absolute sales and traffic results at Burger King were clearly weaker than we had hoped, but the business continued to outperform burgers. [quick-service restaurant] “sales and traffic,” Kobza said.
He added that short-term industry pressures are likely masking “incredible changes” at Burger King, which is in the midst of a recovery.
As McDonald's and From WendyBurger King has launched a $5 meal in hopes of winning back customers who had cut back on spending. Executives said the discounts are profitable for franchisees, who have agreed to extend the deal through October.
Restaurant Brands' comparable-store sales abroad rose 2.6%. Executives said strong sales in Brazil, Australia and Japan helped offset weakness in China and the Middle East.
For the second half of the year, Restaurant Brands expects same-store sales growth of approximately 2%.
Two days before the quarter ended, Restaurant Brands completed the acquisition of Popeyes China, which will be included in its next quarter results. The company’s new Restaurant Holdings segment includes the performance of Popeyes China and the restaurants it acquired from Carrols, which was Burger King’s largest U.S. franchise before Restaurant Brands bought it.
