Restaurant Brands Posts Strong Earnings, But U.S. Remodel Delays Spook Investors

Restaurant Brands International reported quarterly earnings and revenue that exceeded analyst expectations, driven by robust performance outside North America. Despite this, the company's stock dropped 6% Thursday after it disclosed a slowdown in the U.S. Burger King remodeling program.

The parent company of Burger King, Tim Hortons, and Popeyes said adjusted earnings per share were 96 cents on revenue of $2.47 billion for the quarter ending December 31. Both figures surpassed Wall Street forecasts. A 7.4% rise in net sales was powered by international markets, where same-store sales jumped 6.1%, significantly ahead of projections.

However, investor attention fixed on a revised timeline for modernizing Burger King's U.S. restaurants. Citing increased costs, executives stated the chain will not meet its original 2028 target to update 85% of its domestic locations. The pace of renovations slowed last year.

Performance across its brands was mixed. While Burger King's same-store sales growth of 2.7% edged past estimates, Tim Hortons' 2.9% increase fell slightly short. Popeyes struggled, with same-store sales declining 4.8%, a sharper drop than anticipated. The company has recently installed new leadership for Popeyes to address operational consistency and refocus on core menu items.

On a conference call, Executive Chairman Patrick Doyle expressed confidence in corrective steps, noting leadership changes made in 2025 and early 2026. "I'm confident that the steps we're taking, particularly the renewed focus on operations, consistency and brand standards, will translate into better performance over time," Doyle said.

The company plans to detail its broader growth strategy, including international expansion moves like its new Burger King China joint venture, at an investor event in Miami on February 26.

Source: CNBC