Restaurant Brands (QSR) Earnings Reveal Mixed Start to 2025, Eyes on 8%+ AOI Growth
- Hardik Shah
- May 8
- 3 min read
TL;DR
Sluggish Q1: Global comparable sales rose just 0.1% (or ~1.2% adjusted for Leap Day), with modest 2.8% system-wide sales growth.
Burger King U.S. shines relatively: Despite a (1.1)% comp drop, BK U.S. outperformed peers due to Reclaim the Flame execution and modern image remodels.
2025 reaffirmation: RBI remains on track to deliver 8%+ organic AOI growth for the year with improving April trends and disciplined cost management.
Business Overview
Restaurant Brands International (NYSE: QSR) operates four major fast food brands—Tim Hortons, Burger King, Popeyes, and Firehouse Subs—across over 32,000 restaurants globally. RBI primarily uses a franchised model and introduced a sixth segment, Restaurant Holdings (RH), in 2024, capturing recent acquisitions like Carrols (BK U.S.) and Popeyes China.
Restaurant Brands Earnings - Q1'25
Revenue: $2.11B, up 21.3% YoY
Adjusted Operating Income (AOI): $539M, flat YoY
Adjusted EBITDA: $642M vs. $627M last year
EPS: GAAP diluted EPS down to $0.49 (from $0.72), but Adjusted EPS grew 3.3% to $0.75
Net income from continuing operations: $223M, down from $328M
Net leverage: 4.7x
“We continue to perform reasonably well compared to many of our global peers… and are confident we’ll deliver at least 8% organic adjusted operating income growth in 2025.” – CEO Josh Kobza
Forward Guidance
2025 Outlook: 8%+ organic AOI growth, despite a soft Q1 start
CapEx & Inducements: $400M–$450M for 2025
Segment G&A (ex-RH): Lowered to $600M–$620M (from $650M–$670M)
Net restaurant growth (NRG): Now expected at ~3%, slightly down due to BK China refranchising
“We believe the business will get simpler from here... and we’ve set ourselves up to continue delivering adjusted operating income growth of 8% or better.” – Executive Chairman Patrick Doyle
Operational Performance
Tim Hortons: Flat comps; strength in drive-thru operations and breakfast innovation with Ryan Reynolds-backed campaign.
Burger King U.S.: Comp sales fell (1.1)%, yet outperformed peers due to execution of Reclaim the Flame plan; mid-teens uplift from remodeled stores.
Popeyes: Comps down (4.0)% after lapping a Super Bowl ad in 2024; increased national advertising and operational upgrades underway.
Firehouse Subs: +0.6% comps, 7.3% system-wide sales growth, highest digital mix among home market brands at 45%.
International: Strong 8.6% system-wide sales growth led by UK, Germany, Brazil, Japan, and Australia.
“With a sharper focus on fundamentals... we’re confident in our ability to perform in the quarters and years ahead.” – Josh Kobza on Popeyes
Market Insights
Consumer confidence in Canada and Mexico dipped but showed signs of April recovery.
QSR’s value propositions helped outperform in international markets like the UK, Germany, and Brazil.
BK China transition underway; ~12 months portfolio cleanup expected, with minimal system sales impact.
Strategic Initiatives
Burger King U.S.: 400 remodels planned for 2025; aiming for 85% modern image penetration by 2028.
Popeyes: “Easy to Love” strategy to pair iconic chicken with better ops and kitchen upgrades.
Firehouse Subs: Strong new store commitments and subcategory outperformance continue.
Tim Hortons: Return to positive net unit growth in 2025, with Western Canada focus.
Capital Allocation
Dividend: $0.62/share declared for Q2 2025 (payable July 8)
Free Cash Flow: $89M in Q1, affected by seasonal tax timing and $77M in Canadian tax law changes
Cash: $899M on hand, $2.1B total liquidity
Debt/Leverage: Net leverage at 4.7x; interest expense expected at $500M–$520M for 2025
The Bottom Line
Despite a sluggish Q1 driven by macro pressure and Leap Day effects, Restaurant Brands remains confident in hitting 8%+ AOI growth for 2025. Burger King U.S. continues to build on operational improvements, Tim Hortons shows resilience, and international markets are growing robustly. The company’s capital-light model and refranchising efforts aim to simplify operations, reduce future CapEx, and improve long-term profitability.
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