Restaurant Brands International on Tuesday reported quarterly earnings and revenue that beat analysts’ expectations, fueled by strong same-store sales growth from Burger King’s overseas restaurants.
The burger chain’s international same-store sales soared 20.1% in the quarter, but in its home market they were flat as the chain embarks on a turnaround to rejuvenate demand. Worldwide, Burger King saw its same-store sales climb 10.3% in the quarter.
Burger King is Restaurant Brands’ only chain to have restaurants in Russia, through a joint venture where it owns a 15% stake. The company has previously said it’s looking to divest its interest in the joint venture, and said Tuesday the decision to suspend all corporate support to those locations had a “measurable, but not material” impact on its results this quarter.
Burger King’s Russian restaurants accounted for just 0.6% of the company’s total revenue last year. Those locations dragged down its adjusted earnings before interest, taxes, depreciation and amortization by about $12 million during the first quarter. Rival McDonald’s, on the other hand, reported $127 million in charges related to its Russian business for the first quarter.
Here’s what Restaurant Brands reported for the quarter, compared with what Wall Street was expecting based on a survey of analysts by Refinitiv:
- Earnings per share: 64 cents adjusted vs. 63 cents expected
- Revenue: $1.45 billion vs. $1.41 billion expected
Restaurant Brands reported first-quarter net income of $270 million, or 59 cents per share, down from $271 million, or 58 cents per share, a year earlier.
Excluding items, the company earned 64 cents per share, topping the 63 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 15.2% to $1.45 billion during the period, beating expectations of $1.41 billion.
This marked the first full quarter that Restaurant Brands’ acquisition of Firehouse Subs was included in its revenue. The sandwich chain saw same-store sales growth of 4.2% in the quarter. In the U.S., its same-store sales rose 4.5%.
The company’s Tim Hortons chain reported same-store sales growth of 8.4% for the quarter, which includes double-digit gains in Canada. The coffee chain has taken longer than Restaurant Brands’ other eateries to bounce back from the pandemic because of its home market’s Covid restrictions. A year ago, its same-store sales shrank by 2.3%.
Popeyes Louisiana Kitchen was once again the only chain in Restaurant Brands’ portfolio to report same-store sales declines. Worldwide, same-store sales shrank by 3%. However, the fried chicken chain also reported net restaurant growth of 7.9%. Only locations that have been open at least 13 months are included in its same-store sales metrics.
CEO Jose Cil said in a statement that home-market digital sales reached their highest levels ever during the first quarter. The company does not disclose how much of its system-wide sales come from digital channels, although its digital sales reached $10 billion in 2021.
