Restaurant Brands International reported first-quarter earnings and revenue that fell short of analysts’ expectations, as key brands like Tim Hortons, Burger King, and Popeyes posted declining same-store sales. Despite the soft start to the year, the company’s leadership expressed optimism, citing improved performance already visible in the early weeks of the second quarter.
The company reported adjusted earnings per share of 75 cents, slightly below the expected 78 cents, while revenue came in at $2.11 billion versus the $2.13 billion forecasted. Net income attributable to shareholders dropped to $159 million, or 49 cents per share, compared to $230 million, or 72 cents per share, in the same period last year. The decline was partially due to transaction costs linked to its acquisition of Burger King China.
Still, net sales rose 21%, driven by increased revenue from Popeyes and Firehouse Subs. Same-store sales across all brands rose by only 0.1%, though excluding the impact of the 2024 leap year, that figure would have reached approximately 1%.
Among the company’s major brands, Tim Hortons, which generates over 40% of total quarterly revenue, saw same-store sales fall 0.1%, missing expectations of a 1.4% increase. Last year, the brand had shown strong growth of 6.9%. However, the brand has gained momentum in the second quarter, helped in part by a new breakfast meal collaboration with Canadian actor Ryan Reynolds.
Burger King reported a 1.3% decline in same-store sales, worse than the 0.9% drop anticipated. Its U.S. operations, undergoing a turnaround for more than two years, saw sales fall 1.1%. Despite this, the chain outperformed some competitors. For instance, McDonald’s U.S. same-store sales fell 3.6%, attributed to reduced visits from middle-income consumers. In contrast, Restaurant Brands reported steady behavior across all income groups.
Popeyes experienced the steepest decline, with same-store sales down 4%, more than double the 1.8% drop analysts expected. Last year, a Super Bowl ad helped boost sales, but the chain didn’t advertise during the event this year.
International markets provided some relief, with same-store sales growing by 2.6% outside the U.S. and Canada. The company reaffirmed its capital expenditure forecast for 2025 and remains confident in its long-term targets of 3% same-store sales growth and 8% organic operating income growth annually through 2028.
READ MORE: