Restaurant Brands International on Wednesday reported same-store sales growth of 2.5%, fueled by the better-than-expected performance from Burger King’s and Popeyes’ restaurants.
Shares of the company were roughly flat in morning trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: 81 cents adjusted vs. 79 cents expected
- Revenue: $2.3 billion vs. $2.27 billion expected
The restaurant company reported fourth-quarter net income of $361 million, or 79 cents per share, down from $726 million, or $1.60 per share, a year earlier.
Excluding corporate restructuring fees and other items, Restaurant Brands earned 81 cents per share.
Net sales climbed 26% to $2.3 billion, fueled largely by its acquisitions of its largest U.S. Burger King franchisee and Popeyes China, both which occurred last year.
Still, the company saw better-than-expected sales across all of its segments during the quarter.
“If you look compared to all of our big, traditional [quick-service restaurant] peers, that 2.5% comp across the board was a pretty good outperformance for the quarter,” Restaurant Brands CEO Josh Kobza told CNBC.
In the fourth quarter, McDonald’s U.S. same-store sales fell 1.4%, hurt by an E. coli outbreak linked to its Quarter Pounder burgers. And Popeyes’ rival KFC, which is owned by Yum Brands, reported same-store sales declines of 5% for its U.S. restaurants.
Burger King, meanwhile, posted U.S. same-store sales growth of 1.5%, beating StreetAccount estimates of 0.8%.
Burger King U.S. President Tom Curtis credited its Addams Family menu, timed for Halloween, and its Million Dollar Whopper promotion, which sold 1 million Whopper burgers for just $1. While the burger chain has been in turnaround mode for more than two years, its quarterly results have shown signs that the strategy has won back customers.
This year, Restaurant Brands also plans to start selling off some of the restaurants it acquired through its purchase of Carrols Restaurant Group. The deal was meant to accelerate the chain’s restaurant remodels, but Restaurant Brands hadn’t planned to start refranchising until 2027.
Popeyes’ U.S. same-store sales ticked up 0.1%, reversing last quarter’s declines.
“I think we got some really compelling value offerings into the market in [the fourth quarter], and that helped our performance, both on sales and traffic,” Kobza said.
Tim Hortons reported domestic same-store sales growth of 2.5%. The Canadian coffee chain accounts for more than 40% of Restaurant Brands’ quarterly revenue.
In particular, Tims saw morning sales accelerate, thanks to stronger demand for its breakfast sandwiches and wraps. Unusually warm temperatures in the fourth quarter also led to 6% growth in cold drinks, driving sales of its Iced Capps and cold brew beverages.
In 2025, Restaurant Brands expects Tims to return to net unit growth, driven in part by expansion in underpenetrated rural areas and western Canada.
Restaurant Brands’ international restaurants saw same-store sales growth of 4.7%, beating StreetAccount estimates of 2.7%. The company credited its Burger King and Popeyes locations for fueling higher sales.
The company also increased its footprint by 3.4%, adding 1,055 new restaurants from the same period a year ago.
Looking to 2025, Restaurant Brands plans to spend between $400 million and $450 million on consolidated capital expenditures, tenant inducements and other incentives.
