Restaurant Brands Intl Reports Q2 2026 Results: Full Earnings Call Transcript

Restaurant Brands Intl (TSX: QSR ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. 9% adjusted EPS growth.

Strategic initiatives include advancing towards a 5% net restaurant growth target by 2028 and strengthening partnerships with franchisees. S. 6% comparable sales growth, driven by the Elevation strategy and Whopper promotions. Tim Hortons faced flat sales in Canada, but plans to revive growth with marketing campaigns such as the Harry Potter partnership and new beverage innovations.

5% comparable sales increase and strong unit economics in key markets like China and Germany. S. experienced a sales decline but is focusing on operational improvements and value propositions to return to positive comps in the second half. 5% sales growth, supported by new menu items and strategic partnerships, like the one with Major League Baseball.

The company reiterated its 2026 financial guidance, targeting an 8% organic adjusted operating income growth and maintaining disciplined pricing strategies. Management remains confident in the long-term growth prospects and the effectiveness of their diversified portfolio strategy. Full Transcript OPERATOR Good morning and welcome to Restaurant Brands Intl's second quarter 2026 earnings conference call. All participants will be in listen-only mode.

Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation there will be an opportunity to ask questions. To ask a question you may press star, then one. On your telephone keypad you will hear a tone to confirm that you are in the queue.

To exit the question queue you may press star, then two. All callers will be limited to one question. Please note this event is being recorded. I would now like to turn the conference over to Kendall Peck, RBI's vice president of Treasury and Investor Relations.

Please go ahead. Kendall Peck, Investor Relations Thank you, operator. Good morning, everyone, and welcome to Restaurant Brands Intl's earnings call for the quarter ended June 30, 2026. Joining me on the call today are Restaurant Brands Intl's Executive Chairman Patrick Doyle, CEO Josh Kobza, and CFO Sami Siddiqui.

Following remarks from Josh, Sami, and Patrick, we will open the call to questions. Today's discussion may include forward-looking statements which are subject to risks detailed in the press release issued this morning and in our SEC filings. We will also reference non-GAAP financial measures, reconciliations of which can be found in the press release and trending schedules available on our website. As a reminder, organic adjusted operating income growth is on a constant currency basis.

Excludes results from the restaurant holdings segment for calendar planning purposes. Our preliminary Q3 earnings call is scheduled for the morning of October 29, 2026, and now I'll turn the call over to Josh. Josh Kobza, Chief Executive Officer Thank you, Kendall, and good morning, everyone. Q2 was another strong quarter.

9% adjusted EPS growth. Last quarter we said our results were early proof that the 2028 vision we laid out at our investor day was taking hold. Q2 built on that momentum: we accelerated same store sales, exceeding our long-term 3% algorithm for the third consecutive quarter, delivered double-digit earnings growth, and returned $435 million of capital to shareholders. We also advanced our other key strengthening our path to becoming an investment grade company and making progress towards 5% net restaurant growth, all while being the partner of choice for the best franchisees and the employer of choice for the best talent.

Just as importantly, our results highlight the strength of our diversified portfolio and disciplined operating model. By investing behind each of our brands while executing consistently against our long-term strategies, we've built a portfolio capable of delivering durable top-line and earnings growth across a variety of consumer environments. Those strategies continue to drive results, with Tim Hortons and International each delivering their 21st consecutive quarters of positive same store sales growth. S.

was a standout performer this quarter, with our Elevation strategy driving another major step forward in sales and expanding our outperformance versus the industry to the high single digits. I'm incredibly proud of what our teams and franchisees have accomplished so far this year. 5%, along with nearly 14% adjusted EPS growth. These results highlight the power of strong alignment with our franchisees and consistent execution every day in our restaurants.

We're excited about the opportunities still ahead as we look to build on this momentum in the second half of the year. With that, let's turn to our segment results, starting with Tim Hortons, which represents roughly 41% of our operating profit. 1%. While we maintained our leadership positions in coffee, breakfast, and baked goods, our calendar didn't drive the growth we've come to expect from Tim's and was unable to lap last year's major platform launches.

However, there were encouraging signs as the quarter progressed. In late May, we introduced Meltz, one of the most requested items that guests wanted to return to the menu, and we saw continued growth in cold beverages. As we look ahead, Axel and the team have an exciting marketing calendar, kicking off next week with our Harry Potter Back to Hogwarts campaign, featuring magical baked goods and beverages designed to appeal to fans of all ages and celebrate 25 years since the release of the first film. We'll follow this with new flavors across our core breakfast offerings and an exciting holiday partnership with later in the year.

Our recent matcha launch also unlocks an entirely new beverage innovation opportunity, while the continued rollout of fountain equipment is enabling us to further expand our cold beverage offerings like Soda Swirls, which is Tim's version of a dirty soda, while also improving back-of-house efficiency. We're also excited about our upcoming loyalty partnership with Canadian Tire, which will allow guests to link their Triangle Rewards and Tims Rewards accounts, earning Canadian Tire Money with every Tims transaction and extending the reach of our digital ecosystem through one of Canada's largest loyalty programs.

Beyond marketing, we're on track to accelerate development in Canada with approximately 80 gross openings this year compared to over 50 last year, spanning every Canadian province including Ontario, Alberta, and Quebec. These will primarily be standard drive-thru restaurants which deliver paybacks of under three years, one of the strongest in the industry. And just as importantly, our restaurants continue to make a meaningful impact on the communities that they serve. , and in July, our annual Camp Day raised nearly $13 million to support Tims Foundation Camps.

Taking a step back, while our marketing did not perform as anticipated in Q2, we were encouraged by stronger business performance as the quarter progressed and are excited about the back half calendar. Tim Hortons remains one of the strongest and most loved restaurant brands in Canada. Canadians continue to rank us number one in brand trust and affordable pricing, a testament to the unique role Tim's plays in the everyday lives of our guests. We're focused on building on those strengths by delivering delicious food and beverages, reliable everyday value, and a great experience to our guests.

I'm confident these fundamentals position us well for the years ahead. Now onto our International business, which drives roughly 29% of our operating profit and remains one of the most important growth engines of the business. 7%. Growth was fueled by strong execution across many of our largest markets, including BK Germany, Spain, Brazil, China, Korea, and Japan.

Our teams continue to launch exciting innovation tailored to local preferences across both our core offerings as well as emerging platforms like chicken and beverages. At Burger King China, value chicken innovation, an exciting Whopper collaboration with Michelin chef David Lai, and the continued success of our Whole Muscle Double Patty Chicken Burger drove another great quarter of results. Germany's strong performance was supported by dessert innovation and a new iced beverage platform, while in Spain guests enjoyed our new Wild Ranch Burger. These innovations were complemented by a variety of family partnerships around the world.

Our Mandalorian collaboration extended across over 70 markets including Spain, Germany, and the UK, while our Toy Story 5 kids meal helped drive traffic in countries like Brazil and Argentina. Underpinning all of this is a strong base of everyday value, creating a balanced offering for guests across a wide range of occasions. Earlier in the quarter, Thiago and his team hosted their annual Burger King CEO Summit in France, bringing together leaders across the global Burger King system. Together, we aligned on priorities to drive long-term growth: strengthening restaurant operations, simplifying our technology platforms, and improving unit economics.

5 years across our top 10 growth markets, and we remain committed to improving those over time, delivering attractive returns, supports new unit growth and market expansion, such as the recent successful launch of Firehouse Subs in Australia. In July, I visited our Firehouse business in Brazil with Thiago Yuri and our local team, where transactions per restaurant are up over 60% just this year. While in Brazil, we also toured Burger King and Popeyes restaurants. Popeyes continues to perform very well with comparable sales up over 20% year to date on top of roughly 20% growth in 2025, resulting in improving unit economics.

Meanwhile, our Burger King team has accelerated investments in restaurant image and operations, and they're seeing incredible results there so far. I'm also very encouraged by Burger King's performance in China. Under CPE's leadership, the team has hit the ground running with another quarter of double-digit comparable sales and a sequential improvement in unit economics. Their operational expertise, local market knowledge, and fast pace of execution are very exciting to see, especially given the important role Burger King China plays in our path back to 5% net restaurant growth.

International's performance in Q2 once again demonstrated that our growth is broad-based and repeatable across markets. Our experienced local teams are executing a proven playbook that continues to generate attractive results in a wide range of consumer environments. After more than four years of consistent outperformance, this business remains one of the strongest long-term growth opportunities across our portfolio. 2%.

S. 5% beating the burger QSR industry by over 9 points. In Q2, we continued building on the momentum established by the launch of our Whopper and brand Elevation campaigns earlier this year. Those campaigns were just the first of many chapters in our multi-year Elevation roadmap, all of which is anchored in listening to guest feedback to make the Burger King experience even better and more consistent across the country.

More recently, we introduced the next phase of our journey, Service Elevation, with the launch of the Your Way Champion and Whopper Guarantee. Together, these initiatives reinforce our commitment to ensuring guests get their order their way every time. Every Burger King restaurant now has a dedicated Your Way Champion, a reimagined restaurant general manager devoted to putting the guest experience first and making things right whenever needed. And if a guest's Whopper isn't up to our standards, we'll remake it, with the next one on us.

Importantly, we have many more chapters in our Elevation roadmap ahead of us, from culinary improvements to operational initiatives to image, all of which supports durable outperformance. At the same time, we remain focused on the core pillars of Reclaim the Flame by executing remodels, refranchisings, and marketing centered around the Whopper, families and kids, and consistent everyday value. Our Q2 marketing built on the momentum from the elevated Whopper with platforms like Whopper Wednesday and Whopper by You, featuring the Loaded Jalapeno Whopper, driving even more engagement with our flagship burger platform.

We've seen Whopper platform AUVs grow by over 20% since launching our Elevation campaign, reinforcing our confidence that these initiatives are creating lasting behavior change. In May, we also strengthened our connection with families and kids by collaborating with Disney's Mandalorian, helping drive Q2 kids meal AUVs above 28 per day. That's up nearly 50% since 2022. We're excited about this achievement, but there is still significant opportunity to grow the category as we remain well below historical kids meal levels.

Lastly, underlying all of this is our steady base of everyday value, with $5 duos and $7 trios continuing to provide guests with consistent value and choice. This quarter is more evidence that Tom, his team, and our dedicated franchisees have built, and are continuing to build, a better Burger King. We invited guests back earlier this year to experience the improvements we've made over the past four years, and our results year to date reinforce that those investments are resonating.

What excites us most, though, is that we're still early in our journey, with more chapters of marketing and menu innovation to come alongside continued restaurant remodels and operational improvements that will further strengthen the Burger King experience. S. 3%. While sales remained soft during the quarter, we're encouraged by the improvement we saw in and continue to execute against the same priorities we've discussed: improving operations and service, refocusing on our core menu, and strengthening our value proposition.

During the quarter, we completed the rollout of an improved tender spec across the system and continued leveraging our increased field support through operations coaching, visits, and training. These efforts contributed to improved product satisfaction across our core offerings, and moving forward, we'll continue innovating around those core platforms while ensuring operational simplicity. On value, the $5 Faves platform, introduced in January, continues to perform well, driving higher repeat purchase behavior and helping to support traffic.

In Q2, we layered on the $6 Big Box and our $20 Family Meal to serve additional occasions, and we'll continue to focus on maintaining consistent, easy-to-understand value for guests moving forward. Overall, Peter and his team are focused on the right things, and we remain confident in a return to positive comps in the second half of this year. By working closely with our franchisees, I'm confident Popeyes will deliver the best-tasting, best-value chicken in America. 4% comparable sales growth.

Our new Steak and Cheese Melt was well received by guests and unlocks future flavor innovation opportunities like our recently launched Smokin' Honey Melts. I was just at our convention in Nashville with Mike and the team, and it was great to see the enthusiasm from our franchisees. S. and Canada.

As Firehouse's first national professional sports league partnership, it provides another meaningful platform to build awareness and support long-term growth. We also introduced our new Ladder Up training program for restaurant general managers, which began rolling out this summer and reflects our continued investment in developing great restaurant leaders. Separately, we continue to see excellent momentum across our development pipeline and remain on track to accelerate unit growth this year. With that, I'll hand it over to Sami.

Sami Siddiqui, Chief Financial Officer Thanks, Josh, and good morning, everyone.