Burger King Parent Restaurant Brands Q4: Earnings Beat, 26% Sales Jump, Popeyes Comps Dip And More

Restaurant Brands International (RBI), the parent company of Burger King, Tim Hortons, and Popeyes, reported strong fourth-quarter earnings on Wednesday, with a 26% jump in sales and a 3% increase in shares in premarket trading. The company's earnings per share (EPS) of 81 cents adjusted beat the LSEG estimate of 79 cents, while revenue of $2.3 billion surpassed the $2.27 billion expectation. Here's a breakdown of the key takeaways from the report:

Strong Sales Growth: RBI's net sales climbed 26% to $2.3 billion, fueled by acquisitions of its largest U.S. Burger King franchisee and Popeyes China, which occurred last year. The company also saw better-than-expected sales across all of its segments during the quarter.

Burger King Turnaround: Burger King's U.S. same-store sales growth of 1.5% beat StreetAccount estimates of 0.8%, indicating that the burger chain's turnaround efforts are paying off. Burger King's international restaurants also saw same-store sales growth of 4.7%, further boosting RBI's global growth.

Popeyes Same-Store Sales Dip: Popeyes' U.S. same-store sales ticked up 0.1%, reversing last quarter's declines. However, the chain's international same-store sales growth of 4.7% was below StreetAccount estimates of 2.7%. RBI attributed the dip in Popeyes' U.S. same-store sales to a value-sensitive environment and a lack of promotions that resonated with consumers.

Tim Hortons Steady Performance: Tim Hortons reported domestic same-store sales growth of 2.5%, maintaining its strong performance in the Canadian market. The Canadian coffee chain accounts for more than 40% of RBI's quarterly revenue. Tim Hortons' international restaurants also saw same-store sales growth of 4.7%, contributing to RBI's global expansion.

Looking Ahead: RBI plans to spend between $400 million and $450 million on consolidated capital expenditures, tenant inducements, and other incentives in 2025. The company also declared a target total dividend of $2.48 per common share and partnership exchangeable unit.

In conclusion, Restaurant Brands International's strong fourth-quarter earnings, driven by acquisitions, strategic initiatives, and operational improvements, demonstrate the company's resilience in the face of competitive pressures. While Popeyes' same-store sales dip is a concern, RBI's focus on value, operational enhancements, and strategic marketing efforts can help address this challenge and maintain the company's growth trajectory.