Jose Cil, CEO of Restaurant Brands International, speaks during an interview with CNBC on the floor at the New York Stock Exchange, November 6, 2019.
Brendan McDermid | Reuters
Restaurant Brands International on Friday reported quarterly earnings that topped Wall Street’s expectations as its systemwide sales surpassed 2019 levels.
Shares of the company gained about 3% in morning trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 55 cents adjusted vs. 50 cents expected
- Revenue: $1.26 billion vs. $1.25 billion expected
The company reported fiscal first-quarter net income of $270 million, or 58 cents per share, up from $224 million, or 48 cents per share, a year earlier.
Excluding items, Restaurant Brands earned 55 cents per share, beating the 50 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 2.9% to $1.26 billion, beating expectations of $1.25 billion. The company said that the revenue increase was primarily driven by favorable foreign currency movements. Organic revenue, which strips out the impact of foreign currency, fell due to declining systemwide sales at Tim Hortons.
Tim Hortons reported a same-store sales drop of 2.3%, compared with declines of 10.3% during the year-earlier period. The Canadian coffee chain’s same-store sales in its home market fell 3.3% in the quarter.
Even before the pandemic, the chain was the laggard of Restaurant Brands’ portfolio. Tim Hortons has been upgrading its coffee equipment and using its loyalty program to drive sales growth in the maturing Canadian market. In March, it announced an investment of 80 million Canadian dollars to spend on advertising, new menu items and the loyalty program.
The coffee chain is also facing challenges as Covid-19 outbreaks have restricted mobility in Canada. Ontario, which is home to nearly half of Tim Hortons’ Canadian footprint, is under a stay-at-home until at least May 20. The province just opened up the first doses of vaccines to people at least 40 years old, but second doses won’t be distributed until late summer or early fall.
“Americans are experiencing a very different path out of Covid than Canadians,” Restaurant Brands CEO Jose Cil told analysts.
Burger King’s same-store sales grew 0.7% during the quarter. A year earlier, its same-store sales slid 3.7% as pandemic lockdowns were implemented across the world. Worldwide, the burger chain saw an increase in temporary store closures this quarter. U.S. same-store sales were a bright spot, climbing 6.6%.
And after quarters of eye-popping same-store sales growth stemming from its famous chicken sandwich, Popeyes came down to Earth as it faced tough comparisons to same-store sales growth of 26.2% during the year-earlier period. This quarter, its same-store sales rose 1.5%. U.S. same-store sales increased by 0.9%.
Yum Brands’ KFC and McDonald’s both recently introduced their own chicken sandwiches, which means consumers have new items they may want to try. Both companies reported strong demand in their recent earnings calls.
Burger King also has plans for its own chicken sandwich, which will be introduced later this year.