Restaurant Brands International(QSR) - 2025 Q4 - Annual Results

Financial Performance - Consolidated system-wide sales grew by 5.8% in Q4 2025 and 5.3% for the full year 2025, reaching $12,131 million in Q4 and $46,762 million for the year[2][3] - Comparable sales increased by 3.1% in Q4 2025, with growth led by 6.1% at INTL, 2.8% at TH Canada, and 2.6% at BK US[2][3] - Adjusted Operating Income (AOI) for Q4 2025 was $674 million, reflecting a 15.6% organic growth, while full-year AOI reached $2,584 million, up 8.3% organically[3][15] - Total revenues for Q4 2025 were $2,466 million, an increase from $2,296 million in Q4 2024, and full-year revenues rose to $9,434 million from $8,406 million[3][14] - Net income from continuing operations for Q4 2025 was $274 million, down from $361 million in Q4 2024, with diluted earnings per share from continuing operations at $0.60[3] - Total revenues for the full year 2025 reached $9.434 billion, compared to $8.406 billion in 2024, marking a year-over-year increase of 12.2%[42] - Adjusted net income for the twelve months increased by 11.4% to $1,687 million, compared to $1,515 million in the previous year[70] Shareholder Returns - The company returned approximately $1.1 billion of capital to shareholders in 2025 while continuing to invest for growth[2] - The company declared a dividend of $0.65 per common share for Q1 2026, with an annual total dividend target of $2.60 per share for 2026[33] Restaurant Operations - The system restaurant count at the end of 2025 was 33,041, reflecting a net restaurant growth of 2.9%[3] - The company operates over 33,000 restaurants globally, generating nearly $47 billion in annual system-wide sales[36] - The company anticipates achieving 5%+ net restaurant growth by the end of its long-term algorithm period from 2024 to 2028[34] Segment Performance - Burger King's system-wide sales growth for Q4 2025 was 1.9%, compared to 0.5% in Q4 2024, with total system-wide sales reaching $2,970 million in Q4 2025, up from $2,915 million in Q4 2024[16] - Comparable sales in the U.S. for Burger King increased by 2.6% in Q4 2025, compared to 1.5% in Q4 2024, while net restaurant growth was down by 0.8%[16] - Total revenues for Burger King increased to $383 million in Q4 2025 from $375 million in Q4 2024, driven primarily by higher advertising revenues and contributions from franchisees[20] - Popeyes' system-wide sales growth decreased by 2.5% in Q4 2025, with total system-wide sales at $1,504 million, down from $1,543 million in Q4 2024[22] - Total revenues for Popeyes were $196 million in Q4 2025, a slight decrease from $201 million in Q4 2024, attributed to lower system-wide sales[22] - The FHS segment reported a system-wide sales growth of 10.1% in Q4 2025, with total system-wide sales reaching $346 million, up from $315 million in Q4 2024[24] - The INTL segment achieved a system-wide sales growth of 11.9% in Q4 2025, with total system-wide sales increasing to $5,392 million from $4,643 million in Q4 2024[25] Cost and Expenses - Adjusted Operating Income for Q4 2025 decreased due to higher commodity costs and restaurant wages, with total operating costs rising to $1.845 billion from $1.661 billion in Q4 2024[31] - Advertising expenses increased to $341 million in Q4 2025 from $358 million in Q4 2024, reflecting a rise in the advertising fund contribution rate[31] Debt and Leverage - The company achieved a net leverage ratio of 4.2x by the end of 2025, down from 4.6x in 2024[3] - Total debt as of December 31, 2025, was $13,669 million, a decrease from $14,080 million in 2024, indicating a reduction of 2.9%[74] - Long-term debt, net of current portion, decreased slightly to $13.250 billion in 2025 from $13.455 billion in 2024, a reduction of 1.5%[46] - Adjusted interest expense for 2026 is projected to be between $500 million and $520 million[38] Cash Flow and Assets - Cash flows from operating activities from continuing operations increased to $1.714 billion in 2025, compared to $1.503 billion in 2024, reflecting a growth of 14.0%[48] - Cash and cash equivalents at the end of the period were $1.163 billion, down from $1.334 billion in 2024, indicating a decrease of 12.8%[48] - Total assets increased to $25.615 billion in 2025, up from $24.632 billion in 2024, representing a growth of 4.0%[46] Key Performance Indicators - System-wide sales growth is a key performance indicator, reflecting the percentage change in sales at all franchised and company restaurants[54] - Adjusted EBITDA is used by management to measure leverage, excluding non-cash impacts and non-recurring items[56] - Management emphasized the importance of organic growth metrics to assess underlying business trends, excluding the effects of foreign exchange and specific segment impacts[63]