Franchise Operations - As of December 31, 2024, the company leased or subleased approximately 4,600 properties, primarily to Tim Hortons and Burger King franchisees[35]. - Franchise agreements in the U.S. and Canada typically have a term of 10 to 20 years, with royalties ranging from 3.0% to 6.0% of gross sales[33]. - In 2024, the company entered into master franchise agreements for Popeyes in Italy, Tim Hortons in Indonesia, and Firehouse Subs in Brazil[34]. - As of December 31, 2024, approximately 95% of the company's restaurants are owned and operated by franchisees, indicating a heavy reliance on franchisee performance for future prospects[106]. - The company's operating results are closely tied to the success of independent franchisees, and any decline in franchisee sales could lead to reduced royalty revenues[112]. - The company may encounter challenges in receiving timely financial and operational results from franchisees, which could impair management's ability to react quickly[107]. - The reliance on franchisees for operational consistency poses risks, as any shortcomings could damage the brand's reputation and affect overall revenues[113]. Employee and Labor Matters - Approximately 37,600 employees were reported as of December 31, 2024, with about 34,800 located in the United States[57]. - RBI hired approximately 800 new corporate employees, 53,100 new restaurant employees, and 200 new distribution and manufacturing employees in 2024[61]. - Labor challenges, including a new California minimum wage of $20 per hour effective April 2024, could increase labor costs and impact profitability for both franchisees and company-operated restaurants[114]. - The company emphasizes continuous training and development for employees to enhance talent and operational effectiveness[61]. Financial Performance - Total revenues for 2024 reached $8,406 million, up from $7,022 million in 2023, representing an increase of about 19.6%[376]. - Net income attributable to common shareholders for 2024 was $1,021 million, a decrease from $1,190 million in 2023, which is a decline of approximately 14.2%[376]. - Basic earnings per common share decreased to $3.21 in 2024 from $3.82 in 2023, reflecting a decline of about 15.9%[376]. - The Company reported operating costs and expenses of $5,987 million in 2024, compared to $4,971 million in 2023, indicating an increase of approximately 20.4%[376]. - Comprehensive income attributable to common shareholders for 2024 was $636 million, down from $1,181 million in 2023, a decrease of approximately 46.3%[379]. - The Company’s long-term debt, net of current portion, rose to $13,455 million in 2024 from $12,854 million in 2023, an increase of about 4.7%[373]. - The Company’s retained earnings increased to $1,860 million in 2024 from $1,599 million in 2023, reflecting a growth of approximately 16.3%[373]. - Total cash provided by operating activities increased to $1,503 million in 2024 from $1,323 million in 2023, reflecting a growth of 13.6%[383]. Strategic Initiatives - The company is focused on transforming the restaurant experience through technology and digital engagement, including mobile ordering and loyalty initiatives[77]. - The company is committed to technology and innovation, with continued investment in technology capabilities and digital sales strategies[332]. - The company anticipates growth opportunities for its brands, including Tim Hortons, Burger King, Popeyes, and Firehouse Subs, in both existing and new markets[332]. - The company plans to accelerate international development through joint venture structures and master franchise agreements, impacting future growth and profitability[332]. - The company is focused on strategic priorities including the development of new products and remodeling of Burger King restaurants acquired in the Carrols Acquisition[332]. Economic and Market Conditions - Economic conditions, including inflation and consumer confidence, strongly correlate with restaurant sales and profitability[73]. - The company faces intense competition in the restaurant industry, impacting its ability to respond to consumer preferences and manage operational complexity[69]. - The company faces risks related to global economic conditions, including inflation, high unemployment, and changes in consumer spending, which could impact financial performance[336]. - The company's international revenues are impacted by fluctuations in foreign currency exchange rates[83]. - A hypothetical 10% fluctuation in foreign currencies could have resulted in a $133 million impact on income from operations during 2024[315]. Sustainability and Community Engagement - The company is committed to sustainability, focusing on reducing its environmental footprint and supporting communities[54]. - The Tim Hortons Foundation's annual Camp Day has sent thousands of youth to a multi-year camp-based program through December 31, 2024[60]. - The Popeyes Foundation has provided millions of meals to children in local communities since 2018[63]. - The Tim Hortons annual Smile Cookie initiative has raised millions for local charities since its inception in 1996[60]. Risks and Compliance - The company may face reputational harm and financial penalties if it fails to comply with privacy and data protection laws, especially as it expands its digital platforms[120]. - The company is subject to income and other taxes in Canada, the U.S., and various foreign jurisdictions, which may lead to unanticipated tax liabilities affecting profitability[135]. - Future changes in tax laws, including the OECD's global minimum tax of 15%, could adversely impact the company's effective tax rate and financial results starting January 1, 2024[142]. - The company faces evolving requirements regarding social and environmental sustainability, which could lead to increased costs and risks if not managed effectively[104]. - Outsourcing certain functions to third-party vendors introduces risks related to performance failures, which could disrupt operations and incur additional costs[105]. Acquisitions and Investments - The acquisition of Carrols Restaurant Group Inc. was completed on May 16, 2024, with the company acquiring 85% of the outstanding shares for a total of $1,988 million in consolidated total assets and $1,171 million in consolidated total revenues[344]. - The fair value of acquired operating lease assets was determined to be $705 million, while operating lease liabilities were valued at $684 million, and reacquired franchise rights at $363 million[354]. - The company recorded an indefinite-lived intangible asset for the Firehouse Subs brand valued at $816 million as of December 31, 2024[357]. - The Carrols Acquisition in 2024 increased the number of employees by approximately 24,000, leading to additional liabilities and costs related to labor and regulatory compliance[95]. - The company plans to refranchise the majority of the acquired Carrols restaurants over the next several years, dependent on sourcing qualified franchisees and financing[96]. Financial Instruments and Hedging - The company has cross-currency rate swaps with a notional value of $5,700 million between Canadian dollars and U.S. dollars, and $2,750 million between Euros and U.S. dollars, to hedge against foreign currency exchange rate volatility[313]. - The company has entered into interest rate swaps with a total notional value of $4,120 million to hedge against interest rate changes on its Term Loan Facilities[316]. - A hypothetical 1.00% increase in SOFR would increase the company's annual interest paid by approximately $20 million[317]. - The company does not use financial instruments to hedge commodity prices, which may lead to higher costs depending on market conditions[320]. Internal Controls and Audits - The effectiveness of internal control over financial reporting was assessed as effective as of December 31, 2024, based on criteria established by COSO[343]. - The company’s internal control over financial reporting was audited and found to be effective, with no material weaknesses identified[363]. - The company’s financial statements were audited and presented fairly in all material respects, conforming to U.S. generally accepted accounting principles[349].

Company Overview - Firehouse Subs, founded in 1994 by two former firefighter brothers in Florida, is known for its made-to-order sandwiches featuring premium meats and cheeses, which are sliced in-house and steamed for enhanced flavor [2][11] - The brand is part of Restaurant Brands International (RBI), which operates over 32,000 restaurants globally and generates nearly US$45 billion in annual system-wide sales [12] Expansion Plans - Firehouse Subs plans to enter the Australian market with a goal of opening 165 restaurants over the next 10 years, starting with the first location in Southeast Queensland in late 2025 [1][4] - Retail Food Group (RFG), Australia's largest multi-brand retail food franchisor, will manage the expansion and aims to make Firehouse Subs the top sandwich choice in Australia [1][4] Market Potential - The Australian sandwich market is valued at A$1.7 billion, presenting a significant opportunity for Firehouse Subs to establish its presence [4] - RFG plans to open 15 company-owned restaurants within the first three years, followed by franchising opportunities starting in the fourth year [6] Employment Impact - The launch of Firehouse Subs in Australia is expected to create thousands of jobs over the next decade across various sectors, including construction, supply chain, distribution, and restaurant management [7]

Core Insights - Restaurant Brands International Inc. (RBI) has acquired nearly 100% of Burger King China for approximately $158 million in an all-cash transaction, demonstrating its commitment to long-term growth in the region [1][2] - The company plans to engage advisors to identify a new local operating partner to inject primary capital and become the controlling shareholder, aligning with its strategy of partnering with experienced local operators while maintaining a primarily franchised business [2][4] Company Background - RBI is one of the world's largest quick service restaurant companies, with nearly $45 billion in annual system-wide sales and over 32,000 restaurants in more than 120 countries and territories [5] - The company owns four prominent quick service restaurant brands: Tim Hortons, Burger King, Popeyes, and Firehouse Subs, which have been serving their respective markets for decades [5] Historical Context - TFI Asia Holdings has been a key partner in expanding Burger King in China, growing the number of restaurants from approximately 60 in 2012 to around 1,500 today [3] - Cartesian has also played a significant role in supporting Burger King's development in China and continues to partner with RBI in growing the Tim Hortons business in the region [3]

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, has launched the "Light Bagel Sandwich Lunch Box Series" to enhance its offerings of high-quality, convenient meals targeting urban consumers seeking healthy options [1][8] Product Offering - The new lunch box series includes a combination of a bagel sandwich, a fresh vegetable salad, and a healthy beverage, available nationwide starting February 18 [2] - Customers can choose from eight bagel sandwich varieties, five side dishes, and eleven beverage options, allowing for customization based on personal tastes and nutritional preferences [2] Pricing and Promotions - The starting price for the lunch box is RMB 25.8, especially attractive with a 40% discount available through the "Chibaobao Card," making it a cost-effective option for consumers [3] Health and Quality Focus - The lunch box series emphasizes "light and low-calorie" options, with all ingredients meeting strict quality and calorie control standards [4] - Beverages in the series adhere to a "5-Zero" commitment, ensuring no non-dairy creamer, artificial creamer, hydrogenated vegetable oils, trans fats, or instant tea powder [4] Nutritional Composition - The bagel sandwiches feature high-fiber bagels paired with premium proteins such as chicken breast, tuna, and beef, offering a nutritionally balanced meal [5] - The beverage selection includes Americano coffee and low-calorie lemon water, complementing the healthy meal options [5] Convenience and Packaging - The lunch box is designed for both dine-in and takeaway, catering to the needs of urban professionals for flexibility [6] Market Potential - The CEO of Tims China expressed excitement about the market potential of the new lunch series, highlighting its role in expanding the lunch menu and meeting diverse consumer needs [8]

Group 1 - Restaurant Brands International (NYSE: QSR) reported better-than-expected results for the fourth quarter, surpassing both top-line sales and earnings per share (EPS) [1] - The company operates in various segments of the restaurant industry, including quick-service restaurants (QSR), fast casual, casual dining, fine dining, and family dining [1] - The analysis of restaurant stocks is supported by advanced analytical models and specialized valuation techniques to provide detailed insights and actionable strategies for investors [1] Group 2 - The founder of Goulart's Restaurant Stocks leads efforts in analyzing restaurant stocks in the U.S. market, focusing on helping investors make informed decisions [1] - The company engages in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1]

Oppenheimer analyst Brian Bittner reiterated an Outperform rating on Restaurant Brands International Inc QSR with a price forecast of $77.00.Management expects EBIT growth for 2025 to align with the long-term target of over 8%. Key expectations include segment G&A between $650 million and $670 million, approximately 19% TH-distribution margins, an ~$58 million benefit from the expiration of BK-US corporate advertising expenses, and a ~$19 million headwind due to BK China.Adjusting the model, the analyst pro ...

Core Insights - Restaurant Brands International, Inc. (QSR) reported strong fourth-quarter 2024 results, with earnings and revenues exceeding expectations and showing year-over-year growth [1][2]. Financial Performance - Adjusted earnings per share (EPS) for Q4 were 81 cents, surpassing the Zacks Consensus Estimate of 79 cents, reflecting an 11% year-over-year increase [2]. - Quarterly net revenues reached $2.29 billion, beating the consensus mark by 0.1%, and increased by 26.2% year over year [2]. - Adjusted operating income rose 13.5% year over year to $578 million, exceeding projections [11]. - Adjusted EBITDA was $688 million, up 14.1% from $603 million in the prior-year quarter, also surpassing estimates [12]. Segment Performance - Tim Hortons (TH) reported revenues of $1.03 billion, up 0.8% year over year, with system-wide sales rising 3.2% [5]. - Burger King (BK) generated revenues of $374 million, an 8.7% increase from the previous year, driven by acquisitions and higher advertising revenues [6]. - Popeyes Louisiana Kitchen (PLK) saw revenues of $201 million, up 10.6% year over year, although comparable sales fell by 0.2% [7]. - Firehouse Subs (FHS) reported revenues of $58 million, a 14.2% increase, with net restaurant growth of 6.3% [8]. - International segment revenues were $237 million, up 5.8% year over year, supported by higher royalties from franchisees [9]. - Restaurant Holdings (RH) segment revenues totaled $445 million [10]. Cash and Capital - As of December 31, 2024, cash and cash equivalents stood at $1.33 billion, up from $1.14 billion a year earlier [13]. - Long-term debt increased to $13.5 billion from $12.9 billion as of December 31, 2023 [13]. - Net cash provided by operating activities for the year was $1.5 billion, compared to $1.32 billion in the previous year [14]. 2024 Highlights - Total revenues for 2024 were $8.4 billion, up from $7 billion in 2023 [16]. - Adjusted EBITDA for 2024 was $2.8 billion, compared to $2.6 billion in 2023 [16]. - Adjusted diluted EPS for 2024 was $3.34, an increase from $3.24 in the previous year [16]. 2025 Guidance - The company anticipates adjusted net interest expense to be between $500 million and $520 million, with segment G&A (excluding RH) expected to be in the range of $650 million to $670 million [17]. - Capital expenditures, including tenant inducements and incentives, are projected to be between $400 million and $450 million [17]. Long-Term Guidance (2024-2028) - QSR expects more than 3% growth in comparable sales and at least 5% net restaurant growth from 2024 to 2028 [18]. - System-wide sales growth is projected to exceed 8%, with adjusted operating income expected to grow at a rate equal to or greater than system-wide sales growth [18].

Core Insights - Restaurant Brands International (RBI) reported a 2.5% increase in comparable sales, indicating a positive trend despite a challenging consumer environment [1] - CEO Josh Kobza highlighted that RBI's performance outpaced its quick-service restaurant (QSR) peers, although there were some challenges such as moderated pricing and marketing softness [2] - The company experienced a net restaurant growth of 3.4%, affected by geopolitical issues and a 100 basis point headwind from Burger King China [2] Company Initiatives - RBI is focusing on remodeling its Burger King locations and those acquired from Carrols Restaurant Group, which was purchased for $1 billion in 2024 [3] - The remodeling efforts include implementing cloud-based point-of-sale systems and various back-of-house technologies at all U.S. Popeyes locations by the end of next year [3][4] - These upgrades aim to enhance team member experience, reduce wait times, and improve order accuracy while maintaining food quality [4] Industry Context - The earnings report from RBI followed McDonald's fourth-quarter earnings, which showed a 0.4% increase in global comparable sales, but a 1.4% decline in U.S. comparable sales due to an E. coli outbreak [4] - McDonald's is addressing its challenges through innovations like the nationwide launch of its McValue menu [5][6] - The E. coli issue has been localized, primarily affecting the Rocky Mountains, and McDonald's is focused on executing strong marketing programs to improve guest counts and comparable sales [6]

Financial Data and Key Metrics Changes - In 2024, the company achieved a 2.3% growth in comparable sales, a 3.4% increase in net restaurants, and a 5.4% rise in system-wide sales [8] - Organic adjusted operating income grew by 9%, while adjusted EPS increased to $3.34 from $3.24, representing a 4.4% organic growth [63][64] - The full-year gross profit margin was 19.5%, slightly above the guidance of around 19% [62] Business Line Data and Key Metrics Changes - Tim Hortons surpassed $1 billion in adjusted operating income for the first time, with comparable sales growth of 4.3% in 2024 [17][18] - Popeyes U.S. saw a 4.2% increase in system-wide sales, while Burger King U.S. grew comparable sales by 1% [43][33] - Firehouse Subs experienced a decline in full-year comparable sales by about 1%, but saw a sequential improvement in Q4 [50] Market Data and Key Metrics Changes - International comparable sales grew by 3.3%, with significant growth in markets like Australia, Spain, and the U.K. [26] - The company closed the year with over 15,600 restaurants and over $18 billion in system-wide sales, with 60% driven by the top 10 markets [25] Company Strategy and Development Direction - The company aims for long-term growth with a target of 3% plus comparable sales, 5% plus net restaurant growth, and 8% plus organic adjusted operating income growth from 2024 to 2028 [55] - Focus on enhancing franchisee profitability through operational improvements and modernizing restaurant images [78] - Continued expansion into new markets, particularly in India and China, is seen as a long-term growth catalyst [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 8% plus organic adjusted operating income growth in 2025 despite challenges [77] - The company remains optimistic about resolving issues in Burger King China and expects to update on potential implications soon [67][68] - The focus on quality, service, and convenience is expected to solidify the company's position as a preferred partner for franchisees [12] Other Important Information - The company generated $1.5 billion in free cash flow, allowing for continued investment in key initiatives while returning over $1 billion to shareholders [66] - The average four-wall EBITDA for Tim's Canada exceeded CAD 305,000, while Popeyes U.S. increased to over $255,000 [15] Q&A Session Summary Question: Clarification on 2025 adjusted operating income growth - Management indicated that while same-store sales are a component, they feel confident about achieving 8% plus AOI growth due to planned marketing programs and operational improvements [92][95] Question: Development situation regarding BK China - Management confirmed ongoing discussions about BK China and expects a resolution soon, which will provide clarity on future development [101] Question: Marketing plans for Burger King and Tim's in 2025 - Management highlighted that successful strategies from 2024 will continue, with new innovations and a focus on quality and value [102][107]

Restaurant Brands International Inc QSR shares are trading higher in premarket on Wednesday.The company reported fourth-quarter sales growth of 26.2% year-on-year to $2.296 billion, beating the analyst consensus estimate of $2.274 billion.Consolidated comparable sales increased 2.5%, and net restaurants grew 3.4% versus the prior year. Consolidated system-wide sales increased 5.6%.Comparable sales for Tim Hortons rose 2.2%, Burger King increased 1.1%, and Popeyes Louisiana Kitchen slipped 0.2%. Revenue for ...