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Restaurant Brands Earnings: Tim Hortons, International Drive Q2 Beat Amid Operational Momentum

  • Writer: Hardik Shah
    Hardik Shah
  • Aug 7
  • 3 min read
Restaurant Brands - International Footprint
Source: Restaurant Brands Investor site

TLDR


• Revenue Strength:System-wide sales rose 5.3% YoY, driven by Tim Hortons (+3.6%) and International Burger King (+4.1%).

• Margin Trends:Organic Adjusted Operating Income (AOI) grew 5.7%, aided by cost discipline and strong franchisee performance.

• Forward Outlook:Management reaffirmed guidance for 8%+ organic AOI growth in 2025, fueled by marketing, remodels, and refranchising momentum.


Business Overview


Restaurant Brands International Inc. (NYSE: QSR) operates four iconic Quick Service Restaurant (QSR) brands: Tim Hortons, Burger King, Popeyes, and Firehouse Subs. The company’s portfolio includes over 32,000 restaurants across more than 120 countries, with a franchise-heavy model. Its largest earnings drivers are Tim Hortons and the International Burger King business, accounting for nearly 70% of total Adjusted Operating Income.


Restaurant Brands Earnings Q2'25


  • System-wide sales: $11.85B (+5.3% YoY)

  • Comparable sales: +2.4% globally

    • Tim Hortons Canada: +3.6%

    • Burger King International: +4.1%

  • Net restaurant growth: +2.9%

  • Total revenue: $2.41B (+15.8% YoY)

  • Organic Adjusted Operating Income: $668M (+5.7%)

  • Adjusted EPS: $0.94 (+9.2% YoY)


Management emphasized improved traffic, value perception, and cost controls. Tim Hortons' momentum, International outperformance, and disciplined spending offset headwinds from Burger King U.S. and early-stage investments in Popeyes China and Firehouse Brazil.


Forward Guidance


  • Full-year 2025 AOI growth target: 8%+

  • Net restaurant growth: ~3%

  • Interest expense: $520M (driven by cross-currency swap benefits)

  • Capital expenditures: $400M–$450M (likely at lower end)

  • Dividend: $0.62/share for Q3; targeting $2.48/share for 2025


Risks & Opportunities:

  • Commodity inflation, especially beef (+mid-teens YoY)

  • Coffee price normalization expected to benefit Tims by 2026

  • FX headwinds (~$10M from China exit), ongoing refranchising initiatives


Operational Performance


  • Tim Hortons (43% of AOI):

    • 17th straight quarter of comp sales growth in Canada

    • Morning daypart +5%, driven by Scrambled Eggs Breakfast Box & iced espresso

    • Guest satisfaction hit highest levels since 2018

    • Record fundraising campaigns ($36M total)

“This quarter marked a clear return to the consistent performance we've come to expect from the Tims brand.” — CEO Josh Kobza

  • International (26% of AOI):

    • System-wide sales +9.8% YoY

    • Strong markets: Spain, UK, Germany, Japan, Australia

    • BK China turned positive on comps; operating focus restored

“It’s a really remarkable turnaround that we’ve had in BK China… happening even faster than we expected.” — CEO Josh Kobza

  • Burger King U.S. (19% of AOI):

    • Comps +1.5%, ahead of segment average

    • “Reclaim the Flame” modernization (400 remodels in 2025)

    • Value strategy with $5 Duos / $7 Trios

    • Carrols restaurants delivered ~3% same-store sales growth and 70% higher EBITDA vs. peers

“Our Carrols restaurants… are a great example of the importance of having strong operations led by great restaurant general managers.” — CEO Josh Kobza

  • Popeyes & Firehouse Subs (12% of AOI):

    • Popeyes U.S.: Comps -0.9%, but wraps and flavor-led menus gained traction

    • Firehouse: System-wide sales +6.3%, aided by new store growth


Market Insights


  • Category Dynamics:Fried chicken (Popeyes) remains globally underpenetrated; international expansion is a growth lever.

  • QSR Consumer Trends:Stabilizing value-seeking behavior; BK’s value deals and Whopper innovations resonating with families and price-conscious guests.

  • Remodel ROI:Burger King U.S. remodels driving mid-teens sales lift net of control.


Consumer Behavior & Sentiment


  • Traffic Gains:Tim Hortons saw balanced check and traffic increases; BK U.S. traffic improved with late-night hours and Whopper innovation.

  • Guest Experience:Speed of service, order accuracy, and customer friendliness all improved across major brands.

  • Brand Affinity:Tim Hortons remains “Canada’s most loved brand,” bolstered by community initiatives and loyalty campaigns.


Strategic Initiatives


  • Refranchising: Burger King Carrols refranchising launched two years early; five operators enrolled in “Crown Your Career” ownership program.

  • Digital & Ops:Espresso machine rollout at Tim Hortons expected to elevate beverage consistency.Firehouse Subs unveiled a 3-year growth roadmap at its franchisee summit.

  • M&A and Optimization:Actively seeking new partners for BK China, Popeyes China, and Firehouse Brazil.


Capital Allocation


  • Dividend:Q3 dividend declared at $0.62/share

  • Buybacks:New $1B share repurchase authorization through Sept 2027

  • Leverage:Net leverage reduced to 4.6x (from 5.0x YoY); $1B in cash on hand


The Bottom Line


Restaurant Brands delivered a solid Q2, underpinned by Tim Hortons’ consistency and International strength. Burger King U.S. continues to improve under its “Reclaim the Flame” initiative, while Popeyes and Firehouse are showing early signs of recovery and international traction.


Looking ahead:

  1. Expect further gains from remodels, refranchising, and espresso innovation.

  2. Monitor beef inflation and FX impacts, especially in U.S. and China.

  3. Watch for a potential inflection point in Burger King U.S. performance—particularly as operations and marketing align.



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