Core Insights - Happy Belly Food Group Inc. has signed its first franchise agreement in Atlantic Canada for the province of Prince Edward Island, marking Heal Wellness's 51st franchise agreement and the fourth operating province for the brand [1][3] - The company aims to accelerate growth through both organic initiatives and strategic acquisitions, with a focus on expanding its franchise agreements and securing premium real estate across Canada [5] Company Overview - Happy Belly Food Group Inc. is a leader in acquiring and scaling emerging food brands across Canada, currently operating under the Heal Wellness brand, which specializes in fresh smoothie bowls, acai bowls, and smoothies [1][9] - The company has a total of 531 contractually committed retail franchise locations across its emerging brands, which are either in development, under construction, or already operating [5] Strategic Goals - The signing of the franchise agreement is part of a broader national expansion strategy, with expectations to announce additional projects throughout 2025 as the company continues to secure new franchise agreements [3][5] - The company emphasizes its mission to become a predictable and disciplined growth company, focusing on selecting the right franchise partners and optimal real estate to achieve development goals [5]

Company Overview - Restaurant Brands International Inc. (RBI) is one of the largest quick service restaurant companies globally, with nearly $45 billion in annual system-wide sales and over 32,000 restaurants across more than 120 countries and territories [3]. - RBI owns four prominent quick service restaurant brands: TIM HORTONS®, BURGER KING®, POPEYES®, and FIREHOUSE SUBS® [3]. - The company operates under the "Restaurant Brands for Good" framework, focusing on improving sustainable outcomes related to food, the planet, and communities [3]. Leadership Engagement - Josh Kobza, CEO, and Sami Siddiqui, CFO, will participate in a fireside chat at the Bernstein 41st Annual Strategic Decisions Conference on May 29, 2025, at 8:00 am Eastern Time [1]. - A live audio webcast of the event will be available on the company's investor relations website and accessible for 30 days post-event [2]. Corporate Structure - RBI's principal executive offices are located in Miami, Florida, with brand headquarters in their original markets: Canada for Tim Hortons and the U.S. for Burger King, Popeyes, and Firehouse Subs [4].

Core Insights - Happy Belly Food Group Inc. has opened its 22nd Heal Wellness location at the University of Calgary's University District, marking a significant milestone in its expansion strategy [1][2] - The company aims to accelerate growth through both organic initiatives and strategic acquisitions, with a focus on expanding its franchise network across Canada [5][6] Expansion Strategy - The new Heal Wellness location is the 7th in Alberta and the 10th in Western Canada, contributing to a total of 54 restaurants in the company's network [2] - Happy Belly has 531 contractually committed retail franchise locations across its emerging brands, indicating a robust pipeline for future growth [5] Market Positioning - The University District, with over 38,000 students, presents a significant opportunity for Heal Wellness to capture a large customer base focused on healthy eating [6][7] - The community's design promotes healthy lifestyles, which aligns with Heal's mission to provide quick, fresh wellness foods [7][8] Product Offering - Heal Wellness specializes in smoothie bowls, acai bowls, and smoothies, emphasizing the use of superfood ingredients to support an active lifestyle [8]

Core Insights - Burger King is launching a new menu inspired by the "How to Train Your Dragon" live-action remake as part of its strategy to attract families and boost U.S. sales [2][3][10] - The fast-food chain has been in a turnaround phase for over 2.5 years, investing hundreds of millions to renovate restaurants and improve operations [3][11] - The company aims to leverage family-oriented marketing to enhance customer retention and attract a broader demographic, including millennials and Generation Alpha [4][10] Menu Innovations - New menu items include the Dragon Flame-Grilled Whopper, Fiery Dragon Mozzarella Fries, Soaring Strawberry Lemonade, and the Viking's Chocolate Sundae [1][5] - The Dragon Flame-Grilled Whopper features a red and orange marbled bun, while the fries are made with Calabrian chili pepper breading [5][9] - Previous successful collaborations with movie franchises have led to increased sales, with the Spider-Verse and Addams Family promotions being notable examples [8][10][13] Marketing Strategy - The family-first marketing strategy is expected to enhance customer engagement and sales, particularly as families tend to have higher average checks [4][10] - Burger King plans to change its advertising approach to better promote its movie tie-ins, moving beyond mere association to active promotion [13][14] - The promotion is set to run through early July, with contingency plans in place to monitor stock levels of the new menu items [15] Competitive Landscape - Burger King's U.S. same-store sales recently declined by 1.1%, reflecting broader industry challenges, but the company remains optimistic about its competitive positioning against McDonald's and Wendy's [11][12] - The company believes that its innovative strategies are being observed and potentially emulated by competitors, reinforcing its commitment to its current course [12]

Core Viewpoint - Happy Belly Food Group Inc. is expanding its Heal Wellness brand with the opening of its 21st location in Grand Bend, Ontario, marking significant growth in its restaurant network [1][3]. Expansion and Growth - The new Heal Wellness location is the 12th in Ontario and part of a broader strategy that has seen Happy Belly reach a total of 54 restaurants in its franchised and corporate network [3][4]. - The company is experiencing rapid growth, with a first-mover advantage in the wellness food sector, and has 130 total units under contractual commitment, indicating strong franchise interest [4][5]. - Happy Belly is focused on accelerating growth through both organic initiatives and strategic acquisitions, with 531 contractually committed retail franchise locations across its brands [5]. Market Positioning - Grand Bend is identified as an ideal location for Heal due to its vibrant beachside community and summer tourism, which attracts health-conscious visitors seeking nutritious dining options [6]. - The limited competition for clean-eating offerings in the area positions Heal to quickly become a local favorite, leveraging the town's active lifestyle culture and strong foot traffic [6]. Product Offering - Heal Wellness specializes in quick, fresh wellness foods, including a diverse range of smoothie bowls and smoothies made with high-quality superfood ingredients [7].

Core Insights - Happy Belly Food Group's Heal Wellness brand has signed its 50th franchise agreement in Grande Prairie, Alberta, marking a significant milestone in its expansion strategy [1][3][6] - The company aims to establish Heal Wellness as the leading acai bowl and smoothie brand in Canada, focusing on both organic and inorganic growth [3][4][5] Franchise Development - The signing of the 50th franchise agreement strengthens Heal Wellness's development pipeline and supports consistent organic growth [3][4] - Happy Belly has a total of 531 contractually committed retail franchise locations across its emerging brands, indicating robust expansion plans [6] Market Opportunity - Grande Prairie is identified as a strong market for a smoothie and acai bowl restaurant due to its youthful, health-conscious population and limited competition in the health-focused fast-casual space [7] - The city has a population nearing 70,000 and is experiencing steady economic growth, making it an ideal location for wellness-oriented food concepts [7] Business Model and Strategy - Heal Wellness employs a structured business model that mitigates typical entrepreneurial risks, equipping franchisees with necessary tools for success [5] - The company plans to further expand corporate store development while leveraging momentum from its franchise network, with multiple locations already under construction [5][6]

Core Insights - Restaurant Brands International, Inc. (QSR) reported first-quarter 2025 results with earnings and revenues missing the Zacks Consensus Estimate, but both metrics increased year-over-year [1][3] - Following the results announcement, QSR's shares declined by 0.5% [1] Financial Performance - Adjusted earnings per share (EPS) were 75 cents, missing the consensus estimate of 78 cents, but grew 9.9% year-over-year [3] - Quarterly net revenues reached $2.11 billion, missing the consensus mark by 2.1%, yet increased by 21.3% year-over-year [3] - Consolidated comparable sales increased by 0.1% and net restaurant sales rose by 3.3% year-over-year, while global system-wide sales grew by 2.8% [4] Segment Performance - Tim Hortons (TH) reported revenues of $903 million, down 3.7% year-over-year, with system-wide sales flat [6] - Burger King's (BK) revenues were $356 million, up 1.8% year-over-year, but system-wide sales fell by 1.7% [7] - Popeyes Louisiana Kitchen (PLK) generated revenues of $194 million, up 9% year-over-year, with system-wide sales down by 2.4% [8] - Firehouse Subs (FHS) revenues totaled $54 million, up 7.9% year-over-year, with system-wide sales increasing by 7.3% [9] - International (INTL) segment revenues were $218 million, down 2.1% year-over-year, but up 2.3% organically [10] - Restaurant Holdings (RH) segment revenues were $432 million [11] Operating Metrics - Adjusted operating income decreased by 0.2% year-over-year to $539 million, while adjusted EBITDA increased by 2.4% to $642 million [12] - Cash and cash equivalents at the end of Q1 2025 were $899 million, down from $1.33 billion at the end of 2024 [13] Guidance and Future Outlook - The company expects adjusted net interest expense to be between $500 million and $520 million and has lowered segment G&A expectations [15] - Long-term guidance from 2024 to 2028 anticipates over 3% growth in comparable sales and at least 5% net restaurant growth [16]

Financial Performance - The company reported system-wide sales of $10,496 million for the three months ended March 31, 2025, reflecting a 2.8% growth compared to the same period in 2024[134]. - Comparable sales increased by 0.1% for the same period, down from 4.6% in the prior year[134]. - The total revenues for the three months ended March 31, 2025, were $2,109 million, an increase of $370 million from $1,739 million in 2024[137]. - Net income decreased to $221 million for the three months ended March 31, 2025, down from $328 million in 2024, representing a decline of 32.5%[137]. - The company experienced a net loss of $2 million from discontinued operations for the three months ended March 31, 2025[137]. - The company reported a decrease in income from operations of $109 million, or 20%, compared to the prior year[163]. Acquisitions and Growth - The company completed the acquisitions of Carrols Restaurant Group and Popeyes China, contributing to the overall revenue growth[126]. - System restaurant count increased to 32,149 by the end of March 2025, up from 31,113 in the previous year, indicating a net restaurant growth of 3.3%[134]. - The company plans to refranchise the majority of the Carrols Burger King restaurants and seek new partners for PLK China and FHS Brazil[128]. - On February 14, 2025, the company acquired remaining equity interests in BK China for approximately $151 million in cash and assumed $178 million of outstanding debt[167]. - The company provided $107 million of funding to BK China during the three months ended March 31, 2025[185]. Segment Performance - System-wide sales growth for the TH segment was 0.0% in Q1 2025, down from 7.8% in Q1 2024, with total revenues decreasing to $903 million from $939 million[150]. - The BK segment experienced a system-wide sales decline of 1.7% in Q1 2025, with total revenues slightly increasing to $356 million from $350 million[152]. - The PLK segment reported a system-wide sales decline of 2.4% in Q1 2025, with total revenues at $194 million, up from $178 million[155]. - The FHS segment achieved a system-wide sales growth of 7.3% in Q1 2025, with total revenues increasing to $54 million from $50 million[157]. - The INTL segment's system-wide sales grew by 8.6% in Q1 2025, with total revenues rising to $4,368 million from $4,216 million[158]. Operating Income and Expenses - General and administrative expenses rose to $191 million in Q1 2025, compared to $173 million in Q1 2024, primarily due to the inclusion of RH Segment G&A[140]. - Adjusted Operating Income for the TH segment decreased to $220 million in Q1 2025 from $224 million in Q1 2024, primarily due to unfavorable FX impacts[151]. - The BK segment's Adjusted Operating Income fell to $103 million in Q1 2025 from $106 million in Q1 2024, impacted by a decrease in franchise and property revenues[153]. - The INTL segment's Adjusted Operating Income decreased to $138 million in Q1 2025 from $142 million in Q1 2024, primarily due to unfavorable FX impacts and the absence of prior year revenues from BK China[158]. Cash Flow and Debt - As of March 31, 2025, cash and cash equivalents stood at $899 million, with borrowing availability of $1,248 million under the Revolving Credit Facility[166]. - Cash provided by operating activities was $118 million for the three months ended March 31, 2025, down from $148 million in the same period last year[182]. - Cash used for investing activities was $184 million for the three months ended March 31, 2025, compared to $31 million during the same period in the prior year, primarily driven by the BK China Acquisition and increased capital expenditures[183]. - Cash used for financing activities was $265 million for the three months ended March 31, 2025, compared to $203 million during the same period in the prior year, mainly due to a decrease in proceeds from stock option exercises and an increase in common share dividends[184]. - As of March 31, 2025, total debt was primarily comprised of $5,981 million under Term Loan Facilities with a weighted average interest rate of 5.92%[174]. - Required debt service for the next twelve months is estimated to be approximately $360 million in interest payments and $79 million in principal payments[175]. Tax and Interest - Interest expense, net decreased to $130 million in Q1 2025 from $148 million in Q1 2024, with a weighted average interest rate on long-term debt dropping from 5.0% to 4.4%[148]. - The effective tax rate increased to 26.9% in Q1 2025 from 17.2% in Q1 2024, primarily due to unfavorable impacts from OECD Pillar II guidance[149]. Other Information - The company executed a multi-year "Reclaim the Flame" plan, investing up to $700 million through year-end 2028, with $143 million funded towards the Royal Reset investments as of March 31, 2025[168]. - The company declared a cash dividend of $0.62 per common share, to be paid on July 8, 2025[178]. - There have been no significant changes to the company's contractual obligations as disclosed in the 2024 Annual Report filed on Form 10-K[186]. - No material changes were reported in the quantitative and qualitative disclosures about market risk during the three months ended March 31, 2025[189].

Financial Data and Key Metrics Changes - Q1 consolidated comparable sales increased by 0.1% or just over 1% excluding Leap Day impact, with net restaurant growth at 3.3% translating to system-wide sales growth of 2.8% and organic adjusted operating income growth of 2.6% [8][28][35] - Adjusted EPS rose to $0.75 per share from $0.73, representing nominal growth of 3.3% and organic growth of 9.9% excluding Restaurant Holdings and foreign exchange impact [37] Business Line Data and Key Metrics Changes - Tim Hortons Canada experienced flat comparable sales of 0.1% or approximately 1.2% after adjusting for Leap Day, with operational improvements and marketing initiatives expected to drive future growth [10][11] - International segment delivered 2.6% comparable sales growth or roughly 3.7% excluding Leap Day, with system-wide sales growth of 8.6% driven by strong performance in markets like the UK, Germany, Brazil, Japan, and Australia [14][68] - Burger King U.S. saw a 1.1% decrease in comparable sales, but continued to outperform the broader QSR category due to effective marketing and operational improvements [18][19] Market Data and Key Metrics Changes - In the UK, Burger King gained market share through delivery growth and value platforms, while Germany saw sales momentum from operational improvements and product innovation [14][15] - Burger King India crossed the 500 restaurant milestone, indicating strong growth potential in the market [16] Company Strategy and Development Direction - The company is focused on improving operational excellence, enhancing guest experience, and modernizing restaurant images, with a target of reaching over 85% modern image by the end of 2028 [20][21] - The strategy includes refranchising Carrols restaurants to more engaged operators and enhancing the operational consistency across brands [45][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a complex macro environment but expressed confidence in the company's ability to navigate challenges and deliver at least 8% organic adjusted operating income growth in 2025 [9][28] - There is optimism regarding improved sales momentum in April and a strong marketing calendar for the remainder of the year [10][11] Other Important Information - The company expects total reported 2025 net restaurant growth to be slightly down from last year, primarily due to the transition at Burger King China [30] - Free cash flow generated in Q1 was $89 million, impacted by cash tax payments and working capital seasonality [38] Q&A Session Summary Question: Impact of Canadian macro environment on Tim Hortons - Management noted a dip in consumer confidence but observed improvements in Q2, with confidence in Tim Hortons' performance due to ongoing marketing initiatives and product launches [53][56] Question: Trends in international markets and consumer outlook - Management reported positive same-store sales growth in international markets, with strong performance in Germany and the UK, while acknowledging softer performance in China [60][68] Question: Performance of Burger King U.S. and outlook - Management attributed Burger King's relative outperformance to improved operations and ongoing remodels, with plans for further enhancements and promotions in the coming months [73][80] Question: Capital intensity and remodel expectations - Management expects to complete about 400 remodels in 2025, with an acceleration in 2026, aiming for 85% modern image by 2028 [88][90] Question: Cost savings and organizational efficiency - Management is evaluating opportunities for efficiency in operations, particularly in integrating recent acquisitions and optimizing resources [96]

Financial Data and Key Metrics Changes - In Q1 2025, consolidated comparable sales increased by 0.1% or just over 1% excluding Leap Day, with net restaurant growth at 3.3% [6][7] - System-wide sales growth was reported at 2.8%, while organic adjusted operating income growth was 2.6% [6][32] - Adjusted EPS rose to $0.75 per share from $0.73, reflecting nominal growth of 3.3% and organic growth of 9.9% [34] Business Line Data and Key Metrics Changes - Tim Hortons Canada experienced flat comparable sales of 0.1% or approximately 1.2% after adjusting for Leap Day [8] - Burger King U.S. saw a 1.1% decrease in comparable sales, but continued to outperform the broader QSR category [17] - Popeyes in the U.S. and Canada reported a 4% decline in comparable sales, following a 5.7% increase in the prior year [21] Market Data and Key Metrics Changes - International segment comparable sales grew by 2.6% or roughly 3.7% excluding Leap Day, with system-wide sales growth of 8.6% [12] - Strong growth was noted in key markets such as the UK, Germany, Brazil, Japan, and Australia [12][13] - Burger King India crossed the 500 restaurant milestone, indicating significant growth potential [14] Company Strategy and Development Direction - The company aims to deliver at least 8% organic adjusted operating income growth in 2025, focusing on improving the value proposition for guests [7] - A strategic shift towards refranchising Carrols and enhancing operational excellence across brands is underway [40] - The company is actively working to secure a new local partner for Burger King China, with plans for a portfolio cleanup to reposition the business for long-term success [16][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro environment but expressed confidence in the underlying strength of the brands and operational plans [6][7] - There is optimism regarding improved sales momentum in April and a stronger start to Q2 [7][32] - The company expects to maintain targets for 3% plus comparable sales and 8% plus organic AOI growth on average through 2028 [27] Other Important Information - The company generated $89 million in free cash flow in Q1, impacted by $77 million in cash tax payments [35] - Capital expenditures are expected to be in the $400 million to $450 million range for 2025 and 2026, up from over $330 million in 2024 [37] - The company is focusing on operational efficiency and has revised segment G&A guidance to $600 million to $620 million for 2025 [39] Q&A Session Summary Question: Impact of Canadian macro environment on Tim Hortons - Management noted a slight dip in consumer confidence but observed improvements in Q2, with confidence in Tim Hortons' performance due to strong marketing initiatives [47][50] Question: Trends in international markets - Management expressed satisfaction with international performance, highlighting positive same-store sales and strong brand positioning in key markets [52][56] Question: Performance of Burger King U.S. - Management attributed Burger King's relative outperformance to improved operations and ongoing remodels, with plans for continued enhancements throughout the year [65][68]