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]