Restaurant Brands International (QSR) earnings Q1 2023

Restaurant Brands International on Tuesday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by double-digit same-store sales growth at Tim Hortons and Burger King.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: 75 cents adjusted vs. 64 cents expected
• Revenue: $1.59 billion vs. $1.56 billion expected

Restaurant Brands reported first-quarter net income of $277 million, or 61 cents per share, up from $270 million, or 59 cents per share, a year earlier.

Excluding items, the company earned 75 cents per share.

Net sales rose 9.6% to $1.59 billion. The company’s same-store sales grew 10.3% in the quarter, fueled by double-digit growth at Burger King and Tim Hortons.

Burger King’s same-store sales rose 12.3%, beating StreetAccount estimates of 6.8%. In the U.S., the burger chain’s same-store sales increased 8.7%, an early sign that its domestic turnaround is taking hold.

“This is one of the best results we’ve had in a really long time,” Restaurant Brands CEO Josh Kobza told CNBC.

In April, Burger King U.S. President Tom Curtis told CNBC that the chain is selling more Whoppers than it ever has before, thanks to its new advertising campaign and a Whopper-themed jingle that went viral on TikTok.

“Given these results, moderating cost inflation and our investment behind the brand, coupled with strong operating leverage at the restaurant level, we’re feeling increasingly positive about BK’s path forward this year and into the future,” Kobza told analysts on Tuesday.

The turnaround strategy also focuses on improving franchisees’ profitability. So far in 2023, two of Burger King’s U.S. franchisees have filed for bankruptcy. Kobza said on the conference call that he expects more “short-term noise” as some locations turn over into the hands of its top operators.

Tim Hortons’ same-store sales climbed 13.8%, topping StreetAccount estimates of 10.1%. In Canada, its home market, it reported same-store sales growth of 15.5%.

The Canadian coffee chain underwent its own turnaround in recent years to revive sales in its home market. Restaurant Brands revamped Tims’ menu and loyalty program and upgraded its coffee-brewing equipment. Its mobile app is now the number two e-commerce app in Canada, trailing only Amazon.

Popeyes Louisiana Kitchen reported same-store sales growth of 5.6%, topping StreetAccount estimates of 4%. A year earlier, it reported same-store sales declined 3%.

In January, the fried chicken chain brought back Ghost Pepper Wings for the first time in three years and sold out of the item in just two weeks. Executives said the wings encouraged customers to spend more, improved franchisees’ profit margins and attracted younger customers. The Ghost Pepper Wings returned to menus on Monday as a permanent addition.

Firehouse Subs, the latest addition to Restaurant Brands’ portfolio, saw its same-store sales rise 6.1% in the quarter.