Restaurant Brands International (QSR) Q2 2025 earnings

Introduction to Restaurant Brands International

Restaurant Brands International on Thursday reported mixed quarterly results, as same-store sales declines for Popeyes were offset by strong demand internationally and at Tim Hortons. Shares of the company fell more than 4% in morning trading.

Quarterly Results

Here’s what the company reported for the period ended June 30 compared with what Wall Street was expecting:

• Earnings per share: 94 cents adjusted vs. 97 cents expected
• Revenue: $2.41 billion vs. $2.32 billion expected
  Restaurant Brands reported second-quarter net income attributable to shareholders of $189 million, or 57 cents per share, down from $280 million, or 88 cents per share, a year earlier. Excluding transaction costs from its acquisition of Burger King China and other one-time costs, the company earned 94 cents per share. Net sales climbed 16% to $2.41 billion.

Same-Store Sales

The company’s same-store sales, which only tracks the metric at restaurants open at least a year, rose 2.4% during the quarter. CEO Josh Kobza told CNBC that Restaurant Brands has seen a "modest improvement" in the consumer environment compared with the first quarter, when the company’s three largest brands saw same-store sales decline. This quarter, Restaurant Brands’ international restaurants reported same-store sales growth of 4.2%.

Brand Performance

Tim Hortons, which accounts for more than 40% of Restaurant Brands’ total revenue, reported same-store sales growth of 3.4%. In April, the Canadian coffee chain launched the Scrambled Eggs Loaded Breakfast Box, and the following month it brought actor Ryan Reynolds on to promote it, which executives called a "big success." Burger King reported same-store sales growth of 1.3%. Its U.S. division, which has been in turnaround mode for nearly three years, saw same-store sales increase by 1.5%. Burger King’s domestic marketing has focused on the Whopper and targeting families with offerings like its "How to Train Your Dragon" movie tie-in meal.

Challenges and Improvements

Popeyes was the laggard of the portfolio for the most recent quarter, reporting same-store sales declines of 1.4%. But the fried chicken chain’s results have improved compared with the first three months of the year, when its same-store sales slid 4%. To lift sales in the second half of the year, Popeyes has a "bunch of innovation" on its schedule, Kobza said. The chain has also been trying to improve its store operations. As beef prices rise and consumer preferences shift away from red meat, more fast-food chains have been leaning into chicken. McDonald’s released its McCrispy Strips and brought back its Snack Wraps, while Yum Brands’ Taco Bell launched Crispy Chicken Nuggets.

Outlook and Projections

For the full year, Restaurant Brands reiterated its forecast, anticipating that it will spend between $400 million and $450 million on consolidated capital expenditures, tenant inducements and other incentives. The company also said that it still expects to reach its long-term algorithm, which projects 3% same-store sales growth and 8% organic adjusted operating income growth on average between 2024 and 2028.

Conclusion

Restaurant Brands International’s mixed quarterly results reflect the challenges and opportunities in the fast-food industry. While same-store sales declines at Popeyes pose a challenge, the strong performance of Tim Hortons and international growth offer positive signs. The company’s efforts to innovate and improve operations across its brands will be crucial in navigating the competitive landscape and meeting its long-term projections.

FAQs

Q: What were the quarterly earnings per share for Restaurant Brands International?
A: The company reported 94 cents adjusted earnings per share.
Q: How did same-store sales perform for each of the company’s major brands?
A: Tim Hortons saw a 3.4% increase, Burger King had a 1.3% increase, and Popeyes experienced a 1.4% decline.
Q: What is the company’s outlook for the full year?
A: Restaurant Brands International expects to spend between $400 million and $450 million on consolidated capital expenditures and still aims to reach its long-term algorithm projecting 3% same-store sales growth and 8% organic adjusted operating income growth on average between 2024 and 2028.
Q: How is the fast-food industry trending in terms of consumer preferences?
A: There is a shift away from red meat towards chicken, with several major chains introducing new chicken-based menu items.
Q: What initiatives is Popeyes undertaking to improve its sales?
A: Popeyes has a pipeline of innovations scheduled for the second half of the year and is working on improving its store operations.