Restaurant Brands International Earnings: Solid Q3 Fueled by Tim Hortons and Global
- Hardik Shah
- Oct 30
- 4 min read
TLDR
Revenue Strength: Consolidated sales up 6.9% year-over-year, led by Tim Hortons and International.
Margin Trends: Organic Adjusted Operating Income (AOI) grew 8.8%; adjusted EPS up 10.7%.
Forward Outlook: Management reaffirmed 8%+ organic AOI growth for 2025, maintaining confidence in the long-term algorithm.
Business Overview
Restaurant Brands International (RBI) is one of the world’s largest quick service restaurant (QSR) companies, operating over 32,000 restaurants in 120+ markets through four major brands: Tim Hortons, Burger King, Popeyes, and Firehouse Subs. Approximately 70% of earnings come from Tim Hortons and the International business, underscoring RBI’s diversified global footprint and franchised business model.
Restaurant Brands International Earnings
RBI delivered a strong third quarter of 2025, showing resilience in a challenging consumer environment:
Total Revenue: $2.45 billion (+6.9% YoY)
Comparable Sales: +4.0% overall, led by Tim Hortons Canada (+4.2%) and Burger King International (+6.4%)
Adjusted Operating Income (AOI): $702 million (+8.8% organically)
Adjusted EPS: $1.03 (+10.7% YoY)
Net Income: $440 million, up from $357 million a year ago
CFO Sami Siddiqui highlighted disciplined cost management and lower net interest expenses as key drivers, alongside reduced segment G&A and refinancing benefits.
“Our strategy is working—balancing brand investments with financial discipline to deliver consistent, long-term growth,” Siddiqui said.
Forward Guidance
RBI maintained full-year guidance, reiterating at least 8% organic AOI growth for 2025 and steady net restaurant expansion of around 3%. Capital expenditures are now expected at ~$400 million, down from prior guidance of $400–450 million.
Siddiqui added that elevated U.S. beef prices remain a short-term margin headwind but are expected to normalize as global trade and herd cycles stabilize.
Operational Performance
Tim Hortons (TH)
Tim Hortons continued its leadership with 4.2% same-store sales growth, driven by menu innovation and beverage strength. CEO Josh Kobza highlighted success in breakfast and beverages:
“It’s a business built on strong brand love, affordable everyday value, and steady menu innovation that keeps our guests coming back,” Kobza said.
Cold beverages grew 10%, and kiosk installations are on track for 800 stores by year-end, driving higher average checks. The chain’s loyalty partnership with Canadian Tire launches in late 2026, expanding guest engagement.
Burger King (BK)
Burger King’s U.S. turnaround gained traction, with comparable sales up 3.2% and consistent category outperformance under its “Reclaim the Flame” plan. Kobza emphasized disciplined value offerings and operational gains:
“We’ve outperformed the burger QSR category for many quarters by staying true to our balanced marketing strategy,” he noted.
Carrols-owned restaurants (within RBI’s “Restaurant Holdings”) saw comparable sales up 4.8%, though beef inflation pressured restaurant-level margins.
Popeyes (PLK)
Performance softened, with U.S. same-store sales down 2%. Management admitted “more work to do” to strengthen the value proposition and guest retention. Efforts are underway to refocus on core offerings and operational consistency.
Firehouse Subs (FHS)
Firehouse Subs continued its growth streak, with same-store sales up 2.6% and net restaurant growth of 7.7%. The brand opened 100 net new restaurants over the past 12 months—five times faster than pre-acquisition.
International (INTL)
RBI’s international business saw 12.1% system-wide sales growth and 6.5% same-store gains, led by strong Burger King performance in Europe and robust Popeyes expansion across EMEA and China. Kobza underscored the momentum:
“Our results highlight the strength and diversity of our international portfolio, fueling double-digit system-wide sales growth,” he said.
Market Insights
RBI’s global portfolio benefited from balanced geographic exposure, with demand resilience in Canada, Europe, and Asia offsetting softness in U.S. chicken QSR. The company’s focus on menu innovation, digital engagement, and operational discipline remains central to its brand playbook.
Chairman Patrick Doyle credited franchisee collaboration and long-term focus for driving momentum:
“Quarter after quarter, our teams and franchisees are delivering for guests and staying focused on what matters most—creating value through better experiences and disciplined pricing,” Doyle said.
Consumer Behavior & Sentiment
Despite tighter consumer budgets, RBI’s brands sustained engagement through value platforms, loyalty programs, and menu variety. Burger King’s “$5 Duos” and “$7 Trios” resonated well with value-seeking guests, while Tim Hortons’ PM-daypart gains showed improved visit frequency among younger demographics.
Strategic Initiatives
RBI remains committed to becoming nearly 100% franchised by refranchising acquired Carrols units and selling Burger King China. The company is also simplifying its structure to become more capital-light and cash generative, with strong liquidity of $2.5 billion and net leverage of 4.4x.
Capital Allocation
Dividend: Declared $0.62 per share, payable January 6, 2026.
Debt & Liquidity: Net leverage reduced to 4.4x; full repayment of Tim Hortons facility completed.
CapEx: Expected at ~$400 million for 2025, reflecting disciplined investment and refranchising proceeds.
The Bottom Line
Restaurant Brands International delivered another quarter of broad-based strength—balancing growth from Tim Hortons and International with a disciplined U.S. turnaround at Burger King. Investors should watch for continued progress on Popeyes’ recovery, Burger King’s refranchising execution, and the sale of Burger King China—all key to achieving the company’s goal of a simpler, high-margin, franchised model.
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