In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Restaurant Brands International LP (RSTRF) reported a system-wide sales growth of 2.8% and organic adjusted operating income growth of 2.6% for Q1 2025.
-
Tim Hortons in Canada is on track to return to positive net unit growth in 2025, with a focus on underpenetrated regions such as Western Canada.
-
Burger King US outperformed the broader Burger QSR category, reflecting progress in the 'Reclaim the Flame' plan.
-
Firehouse Subs in the US and Canada grew comparable sales by 0.6% and net restaurants by 5.9%, continuing to outperform the broader sub sandwich category.
-
The company is confident in delivering at least 8% organic adjusted operating income growth in 2025, supported by improved sales momentum and cost discipline.
Negative Points
-
First quarter consolidated comparable sales were relatively flat at 0.1%, indicating a slow start to the year.
-
Popeye's in the US and Canada saw a 4% decline in comparable sales, following a strong performance in the prior year.
-
Burger King China is undergoing a portfolio cleanup, which includes closing unprofitable restaurants, impacting short-term growth.
-
The company expects total reported 2025 net restaurant growth to be slightly down from last year, primarily due to challenges in Burger King China.
-
There is a $19 million headwind from the loss of royalties and fees at Burger King China, as it is treated as held for sale until a new partner is found.
Q & A Highlights
Q: Can you discuss the impact of the Canadian macro environment on Tim Hortons and your expectations for the brand's resilience? A: Josh Kobza, CEO: The back-to-basics plan has been effective for Tim Hortons in Canada, and despite a dip in consumer confidence, we've seen improvement in Q2. The brand's fundamentals are strong, and we have exciting initiatives like the loaded scrambled eggs box with Ryan Reynolds, which are performing well.
Q: How are trends in international markets, and what is your view on market share trends globally? A: Josh Kobza, CEO: We are pleased with Q1 results, with 2.6% comparable sales growth. Our international business is diversified, with strong brand positioning and modern restaurants. We have seen solid performance in markets like Germany, the UK, and Australia, while China is showing early signs of improvement.
Q: What contributed to Burger King US's relative outperformance in Q1, and what is the outlook for the rest of the year? A: Patrick Doyle, Executive Chairman: The outperformance is due to better execution and restaurant operations, including new ownership and remodeling efforts. We are seeing mid-teens sales lifts from remodels and expect continued improvement in execution and results.