Restaurant Brands International (QSR) reported Q4 2022 earnings on Tuesday, February 14 before the market open that mostly were in line with expectations.
This quarter, which ended December 31, 2022, same-store sales drove strong results, up 9.40%, in addition to restaurant growth, up 4%. The company also appointed Joshua Kobza (the current COO) as the company’s new CEO effective March 1, 2023, as it eyes the future growth plans for its brands which include Tim Hortons, Popeyes, Burger King, and Firehouse Subs. Shares were down in the pre-market following the news.
In a separate release posted to its site, newly appointed Executive Chairman Patrick Doyle said the succession has been in the works for the past several years.
“Over the past several years, the Board of Directors has worked with management to build a thoughtful succession plan for key positions, so this is a natural transition for Josh to lead our next phase of growth,” Doyle said, acknowledging current CEO Cil, he added “José has been an exceptional partner and friend and he has all of our thanks and support as he becomes a valued strategic advisor to the company.”
Here are the restaurant giant’s results compared to Wall Street estimates:
Revenue: $1.69 billion versus $1.68 billion expected
Adjusted earnings per share: $0.72 versus 0.74 expected
Same-store sales: up 7.90% versus 7.92%
Tim Hortons same-store sales: up 9.4%% versus 7.19% expected
Burger King same-store sales: up 8.40% versus 8.91% expected
Popeyes same-store sales: up 3.80% versus 3.14% expected
Firehouse Subs same-store sales: up 0.4% versus 1.25% expected
For Burger King U.S., same store sales increased 5%, higher than analysts’ expectations of 3.10%. This increase comes following a $400 million investment, announced in Sept. 2022, to “increase advertising firepower; drive higher quality restaurant enhancements and remodels; and support ongoing technology and digital investments,” the company said in a release.
As of the end of Q4, the company “funded a total of $13 million toward the Fuel the Flame investment and $17 million toward our Royal Reset investment” per the release.
International sales came in lower than expected, up 11%, compared to analyst estimates of a 13.79% increase. Restaurant Brands International credited this increase to driving overall sales this quarter.
Its coffee chain Tim Hortons saw sales increase 9.4%, with sales in Canada specifically up 11%. The company noted Canada showed “strong sales momentum as the team executes against its strategic priorities.” Unit growth is up 5.8% year-over-year.
Meanwhile Popeye’s, a gem of the pandemic with its chicken sandwich, saw sales increase 3.8%, slightly higher than expectations. In the U.S., same-store sales increased by 1.5% this quarter. Unit growth drove the increase in total sales, up 10.4% with “its strongest development year since joining RBI.”
Firehouse Subs, which it acquired in 2021, saw sales increase 0.4% last quarter.
CITI analyst Jon Tower is on the lookout for the impact of “MCD’s intensifying competitive activity” including its announcement of more celebrity meal offerings. On Super Bowl Sunday, McDonald’s announced its first-ever duo celebrity meal, featuring Cardi B and Offset.
Restaurant Brands has also dabbled in celebrity meals, including Justin Bieber with Tim Hortons and Megan Thee Stallion for Popeyes.
Also on investors’ radar is the role of Doyle, the longtime former CEO of Domino’s, who announced plans to “make a personal investment to purchase 500,000 RBI shares for a value of approximately $30 million and has agreed to maintain his investment for five years,” per a news release. Doyle is set to host a meeting with investors on Wednesday, February 22, 2023 at 1:30 p.m. ET.
Brian Bittner of Oppenheimer said the firm believes Doyle “brings a sharper focus to accelerate sales, improve unit economics and create shareholder value (compensated 100% through equity).”
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