We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Restaurant Brands Q2 Earnings Miss Estimates, Rise Y/Y, Stock Down
Read MoreHide Full Article
Key Takeaways
QSR's Q2 EPS of $0.94 missed estimates but rose 9.2% Y/Y; revenues grew 15.9% to $2.41B.
Tim Hortons and International segments drove improved sales trends and strong execution.
QSR expects at least 8% organic adjusted operating income growth in 2025.
Restaurant Brands International, Inc. (QSR - Free Report) reported mixed second-quarter 2025 results, with earnings missing the Zacks Consensus Estimate but increasing on a year-over-year basis. Meanwhile, net sales exceeded the consensus estimate and increased year over year.
In the second quarter, the company made progress on its strategic priorities. Sales trends improved, and execution was strong, led by the Tim Hortons and International businesses. Across the system, franchisees remained aligned, marketing efforts were effective and operational initiatives improved the guest experience.
Although the consumer climate is still changing, QSR’s performance has shown positive signs of improvement across its largest businesses, and the company expects its revenues and margins to grow in the upcoming period. With momentum building into the second half of the year, management remains confident in delivering at least 8% organic adjusted operating income growth in 2025.
On Feb. 24, 2025, QSR bought the remaining ownership in Burger King China from its former joint venture partners. However, the company plans to sell it and is already looking for a new main owner. This fits with its long-term strategy of working with strong local operators while focusing on a mostly franchised model.
QSR stock tumbled 5.1% during yesterday’s trading session.
QSR’s Q2 Earnings & Revenue Discussion
The adjusted earnings per share (EPS) of 94 cents missed the Zacks Consensus Estimate of 97 cents by 3.1%. Nonetheless, the reported figure grew 9.2% from the year-ago quarter’s adjusted EPS of 86 cents.
Quarterly net revenues of $2.41 billion beat the consensus mark by 2.9%. The top line increased 15.9% on a year-over-year basis.
During the quarter, consolidated comparable sales (comps) increased 2.4% year over year, and net restaurants grew 2.9% year over year. Global system-wide sales rose 5.3% year over year.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands operates through six segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), Firehouse Subs (FHS), International (INTL) and Restaurant Holdings (RH).
TH business reported revenues of $1.08 billion (above our projection of $1.05 billion), up 5% from the prior-year quarter’s levels. Organically, revenues were up 6.2% year over year. The upside was backed by increased revenues in the supply chain as a result of rising commodity prices, overall sales, and consumer packaged goods net sales, which were partly offset by a negative foreign exchange. System-wide sales rose 3.9% year over year compared with the 5.4% growth reported in the prior-year quarter. Comps rose 3.4% year over year compared with a 4.6% rise reported in the year-ago period.
BK’s revenues amounted to $388 million (above our projection of $327.4 million), up 6.6% from the year-ago period (6.5% organically). The increase can be attributed to the strong marketing, modernization and strong guest engagement. Additionally, higher advertising revenues and other services contributed to the upside. System-wide sales grew 1% year over year compared with the 0.7% decline reported in the prior-year quarter. Comps rose 1.3% year over year compared with a 0.1% decline in the year-earlier quarter. Net restaurant growth was down 1.2% year over year compared with a 1.7% decline reported in the prior-year quarter.
PLK generated revenues of $210 million (above our projection of $211.4 million), up 8.2% year over year (8.4% organically). System-wide sales grew 1.6% year over year compared with the 4.6% rise reported in the prior-year quarter. A major contributor to the rise was the purchase of company restaurants through Carrol’s acquisition. Comps fell 1.4% year over year against the 0.5% growth reported in the prior-year quarter. Net restaurant growth was 2.5% year over year compared with 4.3% growth a year ago.
FHS’ revenues totaled $59 million (above our projection of $57.1 million), up 11.3% from the year-ago levels (10.9% organically). System-wide sales increased 6.3% year over year compared with a 3.3% rise reported in the prior-year quarter. Net restaurant growth was 6.4% compared with 3.5% reported in the prior-year quarter. Comps declined 0.8% year over year compared with the 0.1% decline reported in the prior-year quarter.
INTL segment revenues came in at $250 million (above our projection of $242.6 million), up 7.7% year over year (6.2% organically). The upside was driven by higher royalties from Burger King and Popeyes franchisees due to increased system-wide sales. System-wide sales growth was 9.8% year over year compared with the 9.2% growth reported in the prior-year quarter. Comps rose 4.2% year over year compared with the 2.6% growth reported in the prior-year quarter. Net restaurant growth was 5.4% year over year compared with an 8.2% increase a year ago.
During the quarter, RH segment revenues came in at $469 million (below our projection of $489 million), up from $230 million a year ago.
Operating Performance
During the quarter, adjusted operating income rose 5.7% year over year to $668 million. Our projection for the metric was $715.9 million.
Adjusted EBITDA of $762 million was up 5.8% from the prior-year quarter. Our estimate for the metric was $822.8 million.
Cash & Capital
Restaurant Brands ended the second quarter with a cash and cash equivalent balance of $1.02 billion compared with $1.33 billion as of Dec. 31, 2024. As of June 30, 2025, long-term debt (net of current portion) was $13.42 billion compared with $13.45 billion as of Dec. 31, 2024.
Net cash provided by operating activities (for the 12 months ended Dec. 31) was $567 million compared with $482 million in the year-ago period. Adjusted EBITDA net leverage ratio stood at 4.6 compared with 5.0 in the prior-year period.
QSR’s board of directors announced a dividend payout of 62 cents per common share and a partnership exchangeable unit of Restaurant Brands International Limited Partnership in the third quarter of 2025. The dividend is payable on Oct. 7, 2025, to its shareholders of record at the close of business as of Sept. 23.
QSR’s 2025 Guidance
The company expects adjusted net interest expense within $520 million and segment G&A (excluding RH) in the $600-$620 million range. Restaurant Brands expects the RH Segment G&A to be approximately $100 million in 2025.
It expects capital expenditures, tenant inducements and incentives (including RH) to be in the range of $400-$450 million.
QSR Maintains Long-Term Guidance (2024-2028)
The company maintained its long-term (2024-2028) expectations of achieving more than 3% growth in comparable sales and at least 5% net restaurant growth. QSR projects adjusted operating income expected to grow more than 8%.
QSR’s Zacks Rank & Stocks to Consider
Restaurant Brands currently has a Zacks Rank #3 (Hold).
The stock has fallen 12.6% in the past three months. The Zacks Consensus Estimate for BJ's Restaurants’ 2025 sales and EPS indicate an increase of 3.2% and 38.8%, respectively, from the year-ago levels.
El Pollo currently carries a Zacks Rank #2 (Buy). The company has gained 14.1% in the past three years.
The Zacks Consensus Estimate for El Pollo’s 2025 sales indicates growth of 4.8% and EPS is expected to remain at the same year-ago level.
Cheesecake Factory presently carries a Zacks Rank #2. The stock has gained 23.6% in the past three months.
The Zacks Consensus Estimate for Cheesecake Factory’s 2025 sales and EPS implies growth of 5.1% and 9.3%, respectively, from the year-ago levels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Restaurant Brands Q2 Earnings Miss Estimates, Rise Y/Y, Stock Down
Key Takeaways
Restaurant Brands International, Inc. (QSR - Free Report) reported mixed second-quarter 2025 results, with earnings missing the Zacks Consensus Estimate but increasing on a year-over-year basis. Meanwhile, net sales exceeded the consensus estimate and increased year over year.
In the second quarter, the company made progress on its strategic priorities. Sales trends improved, and execution was strong, led by the Tim Hortons and International businesses. Across the system, franchisees remained aligned, marketing efforts were effective and operational initiatives improved the guest experience.
Although the consumer climate is still changing, QSR’s performance has shown positive signs of improvement across its largest businesses, and the company expects its revenues and margins to grow in the upcoming period. With momentum building into the second half of the year, management remains confident in delivering at least 8% organic adjusted operating income growth in 2025.
On Feb. 24, 2025, QSR bought the remaining ownership in Burger King China from its former joint venture partners. However, the company plans to sell it and is already looking for a new main owner. This fits with its long-term strategy of working with strong local operators while focusing on a mostly franchised model.
QSR stock tumbled 5.1% during yesterday’s trading session.
QSR’s Q2 Earnings & Revenue Discussion
The adjusted earnings per share (EPS) of 94 cents missed the Zacks Consensus Estimate of 97 cents by 3.1%. Nonetheless, the reported figure grew 9.2% from the year-ago quarter’s adjusted EPS of 86 cents.
Quarterly net revenues of $2.41 billion beat the consensus mark by 2.9%. The top line increased 15.9% on a year-over-year basis.
During the quarter, consolidated comparable sales (comps) increased 2.4% year over year, and net restaurants grew 2.9% year over year. Global system-wide sales rose 5.3% year over year.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands International Inc. price-consensus-eps-surprise-chart | Restaurant Brands International Inc. Quote
QSR Segmental Details
Restaurant Brands operates through six segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), Firehouse Subs (FHS), International (INTL) and Restaurant Holdings (RH).
TH business reported revenues of $1.08 billion (above our projection of $1.05 billion), up 5% from the prior-year quarter’s levels. Organically, revenues were up 6.2% year over year. The upside was backed by increased revenues in the supply chain as a result of rising commodity prices, overall sales, and consumer packaged goods net sales, which were partly offset by a negative foreign exchange. System-wide sales rose 3.9% year over year compared with the 5.4% growth reported in the prior-year quarter. Comps rose 3.4% year over year compared with a 4.6% rise reported in the year-ago period.
BK’s revenues amounted to $388 million (above our projection of $327.4 million), up 6.6% from the year-ago period (6.5% organically). The increase can be attributed to the strong marketing, modernization and strong guest engagement. Additionally, higher advertising revenues and other services contributed to the upside. System-wide sales grew 1% year over year compared with the 0.7% decline reported in the prior-year quarter. Comps rose 1.3% year over year compared with a 0.1% decline in the year-earlier quarter. Net restaurant growth was down 1.2% year over year compared with a 1.7% decline reported in the prior-year quarter.
PLK generated revenues of $210 million (above our projection of $211.4 million), up 8.2% year over year (8.4% organically). System-wide sales grew 1.6% year over year compared with the 4.6% rise reported in the prior-year quarter. A major contributor to the rise was the purchase of company restaurants through Carrol’s acquisition. Comps fell 1.4% year over year against the 0.5% growth reported in the prior-year quarter. Net restaurant growth was 2.5% year over year compared with 4.3% growth a year ago.
FHS’ revenues totaled $59 million (above our projection of $57.1 million), up 11.3% from the year-ago levels (10.9% organically). System-wide sales increased 6.3% year over year compared with a 3.3% rise reported in the prior-year quarter. Net restaurant growth was 6.4% compared with 3.5% reported in the prior-year quarter. Comps declined 0.8% year over year compared with the 0.1% decline reported in the prior-year quarter.
INTL segment revenues came in at $250 million (above our projection of $242.6 million), up 7.7% year over year (6.2% organically). The upside was driven by higher royalties from Burger King and Popeyes franchisees due to increased system-wide sales. System-wide sales growth was 9.8% year over year compared with the 9.2% growth reported in the prior-year quarter. Comps rose 4.2% year over year compared with the 2.6% growth reported in the prior-year quarter. Net restaurant growth was 5.4% year over year compared with an 8.2% increase a year ago.
During the quarter, RH segment revenues came in at $469 million (below our projection of $489 million), up from $230 million a year ago.
Operating Performance
During the quarter, adjusted operating income rose 5.7% year over year to $668 million. Our projection for the metric was $715.9 million.
Adjusted EBITDA of $762 million was up 5.8% from the prior-year quarter. Our estimate for the metric was $822.8 million.
Cash & Capital
Restaurant Brands ended the second quarter with a cash and cash equivalent balance of $1.02 billion compared with $1.33 billion as of Dec. 31, 2024. As of June 30, 2025, long-term debt (net of current portion) was $13.42 billion compared with $13.45 billion as of Dec. 31, 2024.
Net cash provided by operating activities (for the 12 months ended Dec. 31) was $567 million compared with $482 million in the year-ago period. Adjusted EBITDA net leverage ratio stood at 4.6 compared with 5.0 in the prior-year period.
QSR’s board of directors announced a dividend payout of 62 cents per common share and a partnership exchangeable unit of Restaurant Brands International Limited Partnership in the third quarter of 2025. The dividend is payable on Oct. 7, 2025, to its shareholders of record at the close of business as of Sept. 23.
QSR’s 2025 Guidance
The company expects adjusted net interest expense within $520 million and segment G&A (excluding RH) in the $600-$620 million range. Restaurant Brands expects the RH Segment G&A to be approximately $100 million in 2025.
It expects capital expenditures, tenant inducements and incentives (including RH) to be in the range of $400-$450 million.
QSR Maintains Long-Term Guidance (2024-2028)
The company maintained its long-term (2024-2028) expectations of achieving more than 3% growth in comparable sales and at least 5% net restaurant growth. QSR projects adjusted operating income expected to grow more than 8%.
QSR’s Zacks Rank & Stocks to Consider
Restaurant Brands currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail – Restaurants industry are BJ's Restaurants, Inc. (BJRI - Free Report) , El Pollo Loco Holdings, Inc. (LOCO - Free Report) and The Cheesecake Factory Incorporated (CAKE - Free Report) .
BJ's Restaurants presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock has fallen 12.6% in the past three months. The Zacks Consensus Estimate for BJ's Restaurants’ 2025 sales and EPS indicate an increase of 3.2% and 38.8%, respectively, from the year-ago levels.
El Pollo currently carries a Zacks Rank #2 (Buy). The company has gained 14.1% in the past three years.
The Zacks Consensus Estimate for El Pollo’s 2025 sales indicates growth of 4.8% and EPS is expected to remain at the same year-ago level.
Cheesecake Factory presently carries a Zacks Rank #2. The stock has gained 23.6% in the past three months.
The Zacks Consensus Estimate for Cheesecake Factory’s 2025 sales and EPS implies growth of 5.1% and 9.3%, respectively, from the year-ago levels.