Restaurant Brands International(US:QSR)2025-08-07 13:32Financial Data and Key Metrics Changes - In Q2 2025, the company reported a 2.4% year-over-year increase in comparable sales, with system-wide sales growth of 5.3% and organic adjusted operating income (AOI) growth of 5.7% [6][29] - Adjusted EPS increased to $0.94 per share from $0.86, representing a nominal growth of 9.2% [33] - Free cash flow generated in Q2 was $446 million, with total liquidity at $2.3 billion [34][35] Business Line Data and Key Metrics Changes - Tim Hortons, accounting for about 43% of the business, achieved a 3.6% increase in Canadian comparable sales, marking its seventeenth consecutive quarter of positive sales [9][10] - The International segment, representing 26% of adjusted operating income, delivered nearly 10% system-wide sales growth and 4.2% comparable sales growth [14][15] - Burger King U.S. saw a 1.5% increase in comparable sales, while Popeyes experienced system-wide sales growth of 1.9% [20][27] 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 [15][72] - Burger King China reported positive comparable sales in Q2, indicating a turnaround after previous declines [19][75] 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 with a new partner [9][41] - The strategy emphasizes quality, service, and convenience, with disciplined marketing and operational improvements [8][45] - The company aims for at least 8% organic adjusted operating income growth in 2025 [9][40] 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 [7][9] - The management highlighted the importance of operational consistency and the positive impact of remodels on performance [20][100] - There is optimism regarding the normalization of commodity prices, particularly for beef and coffee, which could benefit operations [36][37] Other Important Information - The company is actively working with Morgan Stanley to identify a new local partner for Burger King China [20] - The capital allocation priorities include investing in brands, maintaining a healthy dividend, and steady deleveraging [35][39] Q&A Session Summary Question: Performance of Carrols restaurants and refranchising plans - Management noted that the outperformance of Carrols restaurants is due to high operational standards and successful remodels, with refranchising efforts starting ahead of schedule [52][56] Question: QSR market conditions in Canada - Management highlighted Tim Hortons' consistent performance and improvement in consumer confidence, indicating no expected deterioration in trends [60][62] Question: International business momentum - Management emphasized strong growth in international markets, particularly in Spain, Germany, and the U.K., with positive developments in Burger King France and China [68][72] 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 [80][82] Question: Value creation for Burger King in the U.S. - Management confirmed a stable value offering strategy, focusing on core items, premium offerings, and relevant value promotions to sustain momentum [86][90]