International restaurant brands reported mixed quarterly results on Thursday, with Popeyes’ struggles offsetting Burger King’s successful turnaround in the United States.
The company’s shares fell about 2% in morning trading.
Here’s what the company reported compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $1.10 adjusted vs. $1.09 expected
- Income: $2.53 billion versus $2.54 billion expected
Restaurant Brands reported third-quarter net income attributable to common shareholders of $542 million, or $1.54 per share, compared with $315 million, or 96 cents per share, a year earlier.
Excluding certain non-cash items, the company earned $1.10 per share.
Net income rose 3.1% to $2.53 billion.
Across its restaurants, the company reported same-store sales growth of 3.8%. Restaurant Brands has reported same-store sales growth of more than 3% over the past five quarters.
While the entire industry saw traffic decline in the third quarter while gas prices remained high, Restaurant Brands said it saw no significant change in consumer behavior.
“The environment, from what we’re seeing, has been relatively stable over the last couple of quarters and even over the last few months,” Josh Kobza, CEO of Restaurant Brands, told CNBC.
Burger King was the best performer, with same-store sales growth of 8.4% in the United States. The burger chain’s domestic market is in the midst of a multi-year turnaround, with a focus on improving its food and restaurants.
“The plans we’ve put in place over the last several years are working and we’re going to continue to execute on them,” Patrick Doyle, president of Restaurant Brands, said during the company’s earnings conference call. “Burger King has delivered more than four years of industry outperformance, and we have now seen three consecutive quarters of truly exceptional results.”
After improving the quality of its Whopper at the start of the year, Burger King turned to its nuggets and sauces.
“Nuggets and sauces, frankly, we’ve known for a while that there was an opportunity,” Kobza told CNBC. “We heard it loud and clear from our guests.”
Since Burger King relaunched its nuggets on September 1, with 100% white meat chicken, sales have soared more than 35%, Kobza said during the earnings conference call. Other core menu items will get an upgrade next year.
Tim Hortons reported same-store sales growth of 1.8% in Canada, its home market. In July, the coffee chain launched a line of matcha drinks, attracting more customers to its locations during the sleepier hours of the afternoon.
Popeyes was once again a laggard in Restaurant Brands’ portfolio. The fried chicken chain’s same-store sales in the United States fell 2.2%.
In recent quarters, Popeyes has struggled as other chicken competitors lured its customers with discounts. Restaurant Brands is attempting to make a comeback by improving its restaurant operations and focusing on its core menu.
Restaurant Brands had previously forecast that Popeyes would return to same-store sales growth in the second half of 2026, but Kobza said during the earnings conference call that the company now believes it will take longer, even if traffic improves. The return of Popeyes’ $6 Big Box promotion in September boosted sales less than expected, according to Kobza. Additionally, the chain narrowed its wings to refocus on its core menu items, which hurt sales in the short term.
The company’s international operations reported same-store sales growth of 3.9%, fueled by its Burger King locations.
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