Restaurant Brands International Reports Q1 2025 Earnings
On Thursday, Restaurant Brands International (RBI) disclosed its financial performance for the first quarter of 2025, revealing both earnings and revenue figures that fell short of analysts’ expectations. The revenue and same-store sales from its prominent chains, including Popeyes, Burger King, and Tim Hortons, experienced declines.
Initial Declines Followed by Encouraging Trends
Despite the disappointing results, RBI is witnessing signs of a sales rebound. CEO Josh Kobza noted, “As we come into [the second quarter], that momentum has improved meaningfully, so we’re seeing some better absolute results as we get into the second quarter that give us confidence in how we’re going to navigate the rest of the year.”
Performance Metrics Compared to Expectations
Here’s a brief summary of RBI’s Q1 performance against analyst predictions:
- Earnings per share: Adjusted earnings stood at 75 cents, compared to the anticipated 78 cents.
- Revenue: Reported at $2.11 billion, slightly below the expected $2.13 billion.
Financial Overview
RBI’s net income attributable to shareholders was $159 million, translating to 49 cents per share, a decrease from the $230 million, or 72 cents per share, reported in the same period last year. After excluding costs from the acquisition of Burger King China and other factors, the adjusted earnings remained at 75 cents per share.
Annual net sales surged by 21% to reach $2.11 billion, bolstered by increased revenue from Popeyes and Firehouse Subs. The overall same-store sales growth was minimal at 0.1%, but excluding last year’s leap day, it would have seen a rise of approximately 1%, according to Kobza.
Challenges Faced by Major Brands
The three primary brands under RBI’s umbrella faced challenges during the quarter:
- Tim Hortons: Representing over 40% of RBI’s quarterly revenue, the Canadian coffee chain reported a 0.1% decline in same-store sales, missing estimates of 1.4% growth. In the previous year, it had enjoyed a robust 6.9% growth.
- Burger King: This chain experienced a 1.3% decline in same-store sales, which exceeded expectations of a 0.9% decline, while its U.S. operations saw a 1.1% drop.
- Popeyes: Registered a significant 4% decline, worse than the expected 1.8% drop, following a successful advertising campaign last year with its first Super Bowl commercial that resulted in 5.7% growth.
International Performance and Future Outlook
In contrast, RBI’s international segment demonstrated positive performance with a same-store sales growth of 2.6%, indicating stronger demand beyond the U.S. and Canadian markets.
Looking ahead, the company has reaffirmed its forecast for 2025, estimating capital expenditures between $400 million and $450 million for various initiatives. Restaurant Brands International remains optimistic, projecting an average same-store sales growth of 3% and an 8% increase in organic adjusted operating income from 2024 to 2028.
For more detailed information, please visit the official press release.
