Restaurant Brands International Q2 Earnings Call Highlights

Key Points

• Restaurant Brands International delivered solid Q2 growth: Systemwide comparable sales rose 3.8%, adjusted EPS increased 12.9% to $1.07, and organic adjusted operating income grew 6.7%. Burger King U.S. led the performance with 8.5% same-store sales growth.
• International operations provided additional momentum, with 5.5% comparable-sales growth and 5.1% net restaurant growth. Burger King China again posted double-digit comparable-sales growth, supporting the company’s goal of reaching 5% annual net restaurant growth by 2028.
• Results were mixed across other major brands: Tim Hortons Canada was nearly flat at 0.1% comparable-sales growth, while Popeyes U.S. same-store sales fell 5.2%. Management is relying on new promotions, operational improvements and value offerings to restore Popeyes to positive comparable sales in the second half of 2026.

Restaurant Brands International NYSE: QSR reported second-quarter results that showed continued sales and earnings growth, led by Burger King U.S. and its international operations, while Tim Hortons Canada posted nearly flat comparable sales and Popeyes remained under pressure.

Chief Executive Officer Josh Kobza said the company generated 3.8% systemwide comparable-sales growth and 2.9% net restaurant growth in the quarter ended June 30. Those results drove 6.4% systemwide sales growth, 6.7% organic adjusted operating income growth and 12.9% adjusted earnings-per-share growth.

Adjusted EPS rose to $1.07 from $0.94 a year earlier. Kobza said the company has exceeded its long-term 3% same-store sales growth algorithm for three consecutive quarters and returned $435 million of capital to shareholders during the quarter.

Burger King U.S. Extends Momentum

Burger King was the company’s strongest major domestic contributor in the quarter. The brand posted 8.6% comparable-sales growth and 8.2% systemwide sales growth. U.S. same-store sales increased 8.5%, outperforming the burger quick-service restaurant industry by more than nine percentage points, according to Kobza.

The performance followed the rollout of Burger King’s Whopper and brand-elevation campaigns, part of the company’s multiyear “Reclaim the Flame” turnaround strategy. Kobza said the company has expanded its focus to service through its “Your Way Champion” restaurant leadership role and a Whopper Guarantee that promises a replacement Whopper and another sandwich if a guest’s order does not meet standards.

The company said average unit volumes for its Whopper platform have grown more than 20% since the elevation campaign began. Burger King also reported that Kids Meal average unit volumes exceeded 28 per day in the second quarter, up nearly 50% from 2022, following a Mandalorian-themed promotion.

Executive Chairman J. Patrick Doyle said the brand’s gains reflect cumulative work on operations, food, marketing, restaurant image and franchisee quality rather than a single promotion. He said the company still sees opportunities to modernize additional restaurants, improve operations and further elevate menu offerings.

On refranchising, Chief Financial Officer Sami Siddiqui said Restaurant Brands began selling acquired Carrols restaurants to franchisees earlier than originally expected. While second-quarter activity was slower than anticipated, he said the pipeline of prospective buyers has more than doubled since the company’s investor day. Restaurant Brands expects to refranchise a few hundred restaurants in 2026 and the remainder in 2027, with the goal of winding down the Restaurant Holdings segment by the end of 2027.

International Growth Offsets Mixed Brand Results

Restaurant Brands’ international business delivered 5.5% comparable-sales growth and 5.1% net restaurant growth, producing 10.7% systemwide sales growth. Kobza cited strength in Burger King markets including Germany, Spain, Brazil, China, South Korea and Japan.

He said Burger King China recorded another quarter of double-digit comparable-sales growth under operator CPE, alongside sequential improvement in unit economics. The company views China as an important part of its path toward 5% net restaurant growth by 2028.

The company also highlighted international Popeyes results, noting that Brazil’s Popeyes comparable sales were up more than 20% year to date, following roughly 20% growth in 2025. Firehouse Subs, meanwhile, recently launched in Australia.

Siddiqui said the company’s top 10 Burger King international growth markets have average new-unit paybacks of between four and five years, with returns improving. He said that excluding China, Burger King’s international average restaurant sales are similar to those in the U.S., while paybacks in the top international growth markets are better than U.S. paybacks.

Tim Hortons and Popeyes Address Near-Term Challenges

Tim Hortons Canada posted comparable-sales growth of 0.1%, though Kobza said performance improved as the quarter progressed. He attributed the softer quarter in part to a calendar that did not match the prior year’s major platform launches and marketing that did not perform as expected.

The company plans to support the second half with a Harry Potter-themed “Back to Hogwarts” campaign, breakfast innovation, a holiday partnership and expanded beverage offerings. Tim Hortons recently launched matcha nationally and is rolling out fountain equipment to support cold beverages such as Soda Swirls. It also plans a loyalty partnership with Canadian Tire that will allow customers to link Triangle Rewards and Tims Rewards accounts.

Despite the subdued comparable-sales performance, Restaurant Brands plans approximately 80 gross Tim Hortons openings in Canada this year, compared with more than 50 last year. Kobza said the new drive-thru restaurants generally offer paybacks of less than three years.

Popeyes U.S. systemwide sales declined 3.3%, as 0.3% net restaurant growth was more than offset by a 5.2% same-store sales decline. Kobza said the company is focused on improving restaurant operations and service, emphasizing core products and maintaining clear value offerings.

Popeyes completed the systemwide rollout of an improved tender specification and introduced value platforms including $5 Faves, a $6 Big Box and a $20 Family Meal. Kobza said product satisfaction, guest complaints and order errors have moved in the right direction, and the company remains confident Popeyes can return to positive comparable sales in the second half of 2026.

Cash Flow, Capital Returns and Outlook

Restaurant Brands generated $501 million in free cash flow during the second quarter, including $62 million of capital expenditures and cash inducements. It repurchased $137 million of stock and said it remains on track to repurchase about $500 million of shares for the full year.

The company ended the quarter with about $2.3 billion in liquidity, including $1.1 billion of cash, and net leverage of 4.1 times. Siddiqui noted that S&P upgraded the company to BB+ in May. Restaurant Brands continues to target corporate investment-grade leverage by 2028, or a low- to mid-three-times net leverage ratio.

• Full-year segment G&A, excluding Restaurant Holdings: $600 million to $620 million.
• Net adjusted interest expense: $500 million to $520 million.
• Capital expenditures and cash inducements: about $400 million.
• Adjusted effective tax rate: 18% to 19%.
• Foreign exchange headwind expected in the second half: about $10 million to adjusted operating income and $0.02 to $0.03 to adjusted EPS.

Siddiqui said the company remains on track to deliver 8% organic adjusted operating income growth in 2026.

About Restaurant Brands International (NYSE:QSR)

Restaurant Brands International Inc NYSE: QSR is a global quick-service restaurant company formed through the combination of established brands. The company's principal holdings include Burger King, Tim Hortons and Popeyes, each of which operates under its own brand identity and menu. Restaurant Brands International's business is centered on developing and expanding these franchised restaurant systems, supporting franchisees with brand management, supply chain coordination, and marketing programs.

RBI's restaurants offer a range of quick-service food and beverage products: Burger King is known for its flame-grilled hamburgers and sandwiches, Tim Hortons for coffee, baked goods and breakfast items, and Popeyes for Louisiana-style fried chicken and seafood.

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