Summary of QSR (Restaurant Brands International) Q1 2026 Earnings Call

1Key Financial Results and Metrics:

Comparable Sales Growth: 3.2%

System-Wide Sales Growth: 6.2%

Net Restaurant Growth: 2.6%

Organic Adjusted Operating Income (AOI) Growth: 10.7%

Adjusted EPS Growth: 14.6%, increasing to $0.86 from $0.75 YoY

Free Cash Flow: Nearly $200 million

Share Repurchases: $60 million initiated in March, with $34 million in Q1 and $26 million in April

Total Liquidity: Approximately $2.3 billion, including $1 billion in cash

2Strategic Updates and Business Highlights:

Burger King: Achieved nearly 6% comparable sales growth in the U.S., driven by the "Reclaim the Flame" initiative and improved guest experience. The Elevated Whopper and value offerings contributed positively.

Tim Hortons: Delivered 1.5% comparable sales growth in Canada, with strong performance in breakfast and beverages. The brand launched a $3 breakfast sandwich and is focused on enhancing PM food offerings.

International Segment: Strong performance with 5.7% comparable sales growth and 11.1% system-wide sales growth, particularly in markets like Spain, Germany, and Brazil. The Burger King China joint venture with CPE is expected to drive growth.

Popeyes: Experienced a 6.5% decline in comparable sales, but management is focused on improving in-restaurant execution and core offerings with initiatives like the $5 Faves platform.

Firehouse Subs: Achieved 8.1% net restaurant growth with flat comparable sales, indicating solid development momentum.

3Forward Guidance and Outlook:

2026 Financial Guidance:

Expecting segment G&A of $600 million to $620 million.

Anticipating net adjusted interest expense to remain flat at $500 million to $520 million.

Capital expenditures projected at around $400 million.

Aiming for 8% organic AOI growth and a path to 5%+ net restaurant growth by 2028.

Share Repurchase Program: Targeting $500 million for the full year 2026.

4Challenges and Points of Concern:

Popeyes Performance: The brand's 6.5% decline in comparable sales raises concerns about competitive pressures and execution challenges.

Beef Costs: High beef prices continue to pressure margins, with expectations for normalization not anticipated until 2027.

Canadian Macro Environment: Softness in consumer confidence and adverse weather conditions impacted Tim Hortons' performance, although the brand still outperformed the sector.

Franchisee Profitability: Ongoing beef cost pressures could affect franchisee margins, potentially impacting overall system performance.

5Notable Q&A Insights:

Tim Hortons: Management acknowledged macro softness but emphasized the brand's strength and commitment to investment in remodels and new openings.

International Markets: Positive performance noted across various regions, particularly in Asia, with a focus on maintaining momentum despite potential macroeconomic headwinds.

Burger King: Confidence in sustained growth due to improved operations and guest satisfaction metrics. Management is focused on accelerating remodels but is cautious about balancing franchise profitability.

Popeyes: Management is optimistic about a turnaround in the second half of 2026, with franchisee alignment and operational improvements being key focuses. Overall, Q1 2026 results reflect a solid start for Restaurant Brands International, with strong performance in several segments, though challenges remain, particularly for Popeyes and in managing cost pressures.