Restaurant Brands earnings miss as Burger King, Popeyes and Tim Hortons post same-store sales declines

Restaurant Brands International on Thursday reported quarterly earnings and revenue that missed analysts’ expectations as same-store sales of Popeyes, Burger King and Tim Hortons declined.

But the restaurant company is seeing sales turn around already.

“As we come into [the second quarter], that momentum has improved meaningfully, so we’re seeing some better absolute results as we get into the second quarter that give us confidence in how we’re going to navigate the rest of the year,” CEO Josh Kobza told CNBC.

Shares of the company were roughly flat in premarket trading.

Here’s what Restaurant Brands reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: 75 cents adjusted vs. 78 cents expected
• Revenue: $2.11 billion vs. $2.13 billion expected

Restaurant Brands reported first-quarter net income attributable to shareholders of $159 million, or 49 cents per share, down from $230 million, or 72 cents per share, a year earlier.

Excluding transaction costs related to its acquisition of Burger King China and other items, the company earned 75 cents per share.

Net sales climbed 21% to $2.11 billion, fueled by higher revenue from Popeyes and Firehouse Subs.

Restaurant Brands posted overall same-store sales growth of 0.1%. Excluding last year’s leap day, its same-store sales would have risen about 1%, according to Kobza.

However, the company’s three largest brands saw same-store sales decline during the quarter and missed Wall Street’s expectations. Other fast-food companies have reported a rough start to the year as weather and a more cautious consumer weighed on demand for their burgers and nuggets.

Tim Hortons, which accounts for more than 40% of Restaurant Brands’ total quarterly revenue, reported that its same-store sales fell 0.1%, missing StreetAccount estimates of same-store sales growth of 1.4%. A year earlier, the Canadian coffee chain reported same-store sales growth of 6.9%.

Tim Hortons has “picked up a lot of speed” in the second quarter, Kobza said. On Monday, the chain launched a new breakfast meal in collaboration with actor — and Canadian — Ryan Reynolds.

Burger King’s same-store sales shrank 1.3%, steeper than estimates of a 0.9% decline. The chain’s U.S. business, which has been in turnaround mode for more than two years, saw same-store sales fall 1.1%.

Popeyes saw its same-store sales slide 4%, the biggest drop of the quarter. Wall Street was anticipating same-store sales declines of just 1.8% for the fried chicken chain. Last year, Popeyes aired its first-ever Super Bowl commercial, helping to lift its quarterly same-store sales growth to 5.7%; the chain didn’t return to advertising in the big game this year.

Demand was stronger outside of the U.S. and Canada. Restaurant Brands’ international segment saw same-store sales growth of 2.6%.

The company reiterated its forecast for 2025, anticipating that it will spend between $400 million and $450 million on consolidated capital expenditures, tenant inducements and other incentives. Restaurant Brands 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.