The great Burger Wars of the early 1980s featured Burger King advertising its flame-broiled burger as superior in taste over McDonald's burgers cooked on flat griddles. Then came Wendy's advertisements in 1984 with legendary actor Clara Peller asking, "Where's the beef," and the fast-food chain claiming its single burger had more beef than Burger King's Whopper or McDonald's Big Mac. With so many burger chains competing against McDonald's and its over 44,000 worldwide locations, according to the company ...

Core Insights - The quick-service chicken category has expanded its share of total food spending across income groups, prompting legacy burger chains to enhance their chicken offerings [1] - Burger King is focusing on its burger offerings, particularly through the "Whopper by You" platform, which allows customers to suggest new burger ideas [2] - The "Whopper by You" initiative has successfully engaged customers and broadened the chain's appeal to women and Gen Z [3] Company Strategy - Burger King aims to lead with its burgers, capitalizing on the current trend of competitors focusing on chicken, creating a unique opportunity for the brand [4] - The company plans to innovate not only with the Whopper but also with its Double Cheeseburger, emphasizing its strength in the burger category [5] - While Burger King acknowledges future chicken opportunities, the primary focus will remain on enhancing its core burger offerings [5][6]

Financial Data and Key Metrics Changes - Comparable sales increased by 4%, net restaurant growth was 2.8%, and system-wide sales grew by 6.9% in Q3 2025 [4] - Organic adjusted operating income growth was 8.8%, with double-digit nominal EPS growth [5][29] - Adjusted EPS rose to $1.03 per share from $0.93 last year, representing a nominal growth of 10.7% [30] Business Line Data and Key Metrics Changes - Tim Hortons Canada, representing roughly 44% of operating profit, saw comparable sales grow by 4.2%, outperforming the broader Canadian QSR industry by approximately three points [7] - The international business, contributing 26% of operating profit, experienced same-store sales growth of 6.5% and net restaurant growth of 5.1% [12] - Burger King U.S. achieved comparable sales growth of 3.2%, outperforming the burger QSR category [20] Market Data and Key Metrics Changes - In France, Burger King launched successful products, leading to improved market share and performance [13][88] - Burger King China saw comparable sales grow by 10.5% in Q3, driven by effective marketing and new product launches [15][16] - Popeyes in the U.K. is set to open its 100th restaurant, demonstrating strong traction in the EMEA region [14] Company Strategy and Development Direction - The company aims for at least 8% organic AOI growth in 2025, focusing on disciplined execution and innovation across brands [5][29] - There is a strategic emphasis on refranchising Burger King restaurants to simplify the business model and strengthen franchise operations [32][46] - The company is actively working to find a new local partner for Burger King China, reinforcing its commitment to long-term growth in that market [33][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging consumer environment while delivering strong results [5][6] - The focus remains on improving guest experiences and operational efficiencies, particularly in the face of elevated beef costs impacting margins [34][66] - Management highlighted the importance of maintaining a disciplined value strategy amidst competitive pressures [21][70] Other Important Information - The company generated $566 million in free cash flow and returned $282 million to shareholders through dividends [31] - The adjusted effective tax rate for the quarter was 17.8%, with expectations for the full year to be in the 18% to 19% range [31] - The company is on track to refranchise approximately 5,100 restaurants in 2025 [32] Q&A Session Summary Question: Insights on Burger King U.S. turnaround trajectory - Management highlighted the importance of modernizing assets, improving operational consistency, and focusing on profitability as key drivers of the turnaround [51][52] Question: Impact of beef costs on cash flow and plans - Management acknowledged that elevated beef costs are a headwind but emphasized that franchisees view these impacts as temporary and plans remain on track [66][68] Question: Satisfaction with the launch of protein lattes in Canada - Management indicated that protein lattes are part of a broader cold beverage strategy, with positive initial results and plans for further innovation [75] Question: Share trends for Tim Hortons in Canada - Management noted that Tim Hortons is consistently outperforming competitors, with same-store sales significantly higher than other large QSRs [79] Question: Performance of the international business - Management reported broad-based improvements in international markets, particularly in France and China, with significant share gains [88][90]

Core Insights - Restaurant Brands International reported quarterly earnings and revenue that exceeded analysts' expectations, driven by growth in its international restaurants and Tim Hortons [1] - The company's shares rose by 3% in premarket trading following the earnings report [1] Financial Performance - The company reported a third-quarter net income attributable to shareholders of $315 million, or 96 cents per share, an increase from $252 million, or 79 cents per share, a year earlier [2] - Excluding transaction costs and other items, adjusted earnings per share were $1.03, surpassing the expected $1 [6] Revenue and Sales Growth - Net sales increased by 6.9% to $2.45 billion, exceeding the expected $2.4 billion [6] - Same-store sales grew by 4%, with the international segment achieving 6.5% same-store sales growth, outperforming the consensus estimate of 4.4% [3] - Tim Hortons reported same-store sales growth of 4.2%, focusing on enhancing food offerings to boost sales and traffic [3] Segment Performance - Burger King's same-store sales rose by 3.1%, indicating the success of its turnaround strategy in the U.S. through restaurant renovations and marketing of core menu items [4] - Popeyes was the only division to report a decline in same-store sales, with a decrease of 2.4%, struggling to compete for value-minded customers [5]

Financial Data and Key Metrics Changes - The company reported global comparable sales growth of 2.4% and system-wide sales growth of 5.3% in Q2 2025, with organic adjusted operating income (AOI) growth of 5.7% [28][5][39] - Adjusted EPS increased to $0.94 per share from $0.86 last year, representing nominal growth of 9.2% [28][30] - Free cash flow generated in Q2 was $446 million, with total liquidity at $2.3 billion [32][33] Business Line Data and Key Metrics Changes - Tim Hortons, accounting for about 43% of the business, saw Canadian comparable sales accelerate to 3.6% [7][12] - The International segment, which represents 26% of adjusted operating income, delivered nearly 10% system-wide sales growth and 4.2% comparable sales [13][14] - Burger King U.S. experienced a 1.5% growth in comparable sales, while Popeyes reported system-wide sales growth of 1.9% [19][25] Market Data and Key Metrics Changes - The international business outperformed many global peers, with strong growth in markets like the U.K., Spain, Australia, and Germany [13][14] - Burger King China showed positive comparable sales in Q2, indicating a turnaround after previous struggles [18][48] Company Strategy and Development Direction - The company is focused on returning to a simplified business model, including refranchising efforts for Carrol's restaurants and positioning Burger King China for success [7][40] - The strategy emphasizes quality, service, and convenience, with disciplined marketing and operational improvements [6][45] - The company aims for at least 8% organic adjusted operating income growth in 2025 [7][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to build on momentum in the second half of the year, despite a dynamic consumer environment [5][39] - The company is optimistic about the long-term potential of Burger King China and the international segment, highlighting strong brand awareness and favorable market dynamics [18][14] Other Important Information - The company is actively working with Morgan Stanley to identify a new local partner for Burger King China [19][30] - The capital allocation priorities remain focused on investing in brands, maintaining dividends, and deleveraging over time [33][34] Q&A Session Summary Question: Performance of Carrols restaurants and refranchising plans - Management attributed the outperformance of Carrols restaurants to high operational standards and significant investments in remodels, with refranchising efforts starting earlier than planned [52][56] Question: QSR market conditions in Canada - Management noted Tim Hortons' consistent performance and improvement in consumer confidence, distinguishing it from competitors [60][62] Question: International business momentum - Management highlighted strong growth in international markets, particularly in Spain, Germany, and the U.K., with positive developments in Burger King China [70][74] Question: Digital strategy and AI capabilities - Management expressed excitement about leveraging AI to enhance customer experience and operational efficiency, indicating ongoing developments in this area [81][83] Question: Value platform and franchisee alignment - Management characterized the value offerings as stable and emphasized a balanced approach to core items, premium offerings, and value [88][90]

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]