Restaurant Brands International(US:QSR)2025-05-08 20:01Financial 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].