Restaurant Brands International (QSR) Q1 FY26 earnings call: guidance and Q&A

How is the Canadian macro environment impacting Tim Hortons, and what is the outlook for the brand given potential difficult backdrops?

Josh Kobza highlighted Tim Hortons' strong brand and consistent outperformance (20 consecutive quarters of SSSG), noting Q1 macro softness due to weather and consumer confidence. He emphasized increased investments in remodels (300+ in Canada) and new restaurant openings, along with the upcoming Canadian Tire loyalty partnership and new cold beverage innovations, giving confidence in the brand's trajectory.

“Tim is a brand that earns its industry outperformance quarter-by-quarter, through quality food and beverages, compelling everyday value, a consistently high-quality guest experience, and as a result, the loyalty of millions of Canadians who make it part of their daily routine.”

asked by Dennis Geiger · answered by Joshua Kobza

What are the consumer and market share trends in other international markets, particularly Europe, and what adjustments are being made?

Josh Kobza stated that the International business had strong results with over 5% SSSG, with EMEA performing well despite energy costs. He highlighted broad-based strength in Asia Pacific (Japan, China, Australia, Korea with double-digit comps) and positive performance in Latin America, especially Brazil. No specific adjustments were mentioned beyond ongoing monitoring of energy costs.

“Our overall International business is outstanding. Our comps are some of the best in the industry. Our system-wide sales growth, which has averaged nearly 13% over the past 3 years is best-in-class and the free cash flow generated by the business is fantastic.”

asked by David Palmer · answered by Joshua Kobza

Given the strong consumer response to the Whopper relaunch, what is the sustainability of Burger King U.S. results, and should investors expect low to mid-single-digit growth or continued outperformance?

Josh Kobza attributed Burger King's momentum to foundational work over 3-4 years (operations, franchisee base, remodels) and effective marketing. He stated the goal is to consistently outperform the burger QSR segment year upon year, with Patrick Doyle adding that Q1 marked an inflection point where the improved experience invited guests back, and continued improvements in food, service, and restaurant image should drive consistent growth.

“marketing amplifies the truth. And the important thing here is that we've built a much better version of Burger King that you're now seeing us talk about. And I think that's what gives us a lot of confidence.”

asked by Danilo Gargiulo · answered by Joshua Kobza

How will RBI ensure that the refranchising of the Restaurant Holdings segment maintains Burger King's business momentum, and how can new franchisees be accretive to trends?

Josh Kobza emphasized that the #1 criteria for new partners is the quality of the local operator. He noted positive early signs from new operators, who are outperforming the system and improving operations. He highlighted strong interest from both external parties and internal Carrols/corporate team members to become franchisees, indicating confidence in the brand's sustainable fundamentals.

“I think there really can't be any greater endorsement of the momentum of the brand and the fact that it's driven by sustainable fundamentals then the very folks who are working on it and driving that success want to become franchisees and be involved and participate in what the brand is doing for decades to come and dedicate their lives and their families' lives to it.”

asked by Brian Bittner · answered by Joshua Kobza

Given the positive momentum, is there an opportunity to accelerate Burger King U.S. remodels, and what is the target for modern restaurants as a percentage of the system by 2026-2028?

Josh Kobza confirmed the current 60% modern restaurant rate, with a target of 80%+. He stated that while the 2028 timeline might be extended slightly, the company is aggressively investing in remodels for company-owned stores. He noted that sustained same-store sales momentum and improved franchisee profitability are key to accelerating the pace of remodels across the system.

“I think what we need to do is see a bit more sustained momentum of the same-store sales and have that flow through to the franchise profitability. And once we get franchise profitability moving meaningfully back in the right direction, which doing these kind of same-store sales helps an awful lot on that, then I think we have a good opportunity to think about trying to move a little bit faster on the remodels, but we got to do it in that order, I think.”

asked by John Ivankoe · answered by Joshua Kobza

What is the status of the Tim Hortons fountain drink equipment rollout, its expected completion, and its potential impact on lunch/dinner food sales?

Josh Kobza stated that about 25% of the Tim Hortons system has rolled out fountain machines, with completion expected over the next few quarters. He explained that the rollout enables operational efficiencies, improves cost profiles, and opens new innovation paths for cold beverages. He also noted it will help drive combo incidents and build the PM food business over time.

“it's an enabler, if you will, to, I would say, a next leg of growth in our cold bev business, and so that's pretty exciting.”

asked by Chris O'Cull · answered by Joshua Kobza

How should the International AOI bad debt recoveries be viewed going forward, and does the 3% portfolio same-store sales growth algorithm apply to 2026 given challenging comparisons?

Sami Siddiqui clarified that the $12 million bad debt recovery in International was a one-off occurrence, but even without it, AOI growth was above algorithm. Josh Kobza confirmed that the 3% SSSG algorithm is a consistent benchmark, and the company is pleased to have cleared it in Q1 and feels good about performance against that threshold in Q2.

“We're really pleased that in our first quarter reporting to you since then, we cleared that 3% bar, and what I can say is that sitting here where we are in early May, we continue to feel good about how we're performing against that threshold in Q2.”

asked by Andrew Charles · answered by Joshua Kobza

Are franchisee margins under similar pressure to RH margins due to high beef costs, and is competitive intensity in the chicken category a headwind for Popeyes?

Sami Siddiqui noted that high beef costs (high single-digit food cost increases in Q1) impacted the food basket, but Carrols' margins saw expansion year-on-year due to top-line sales and operational work, with beef cost relief expected closer to 2027. Josh Kobza acknowledged competition in the growing chicken category but expressed confidence in Popeyes' plan to improve operations, product quality (e.g., tightened tender spec), and value, with underlying sales trends already improving since January.

“We got -- the reason we got involved with Popeyes 9 years ago now is that we knew that there was going to be huge secular growth in the chicken category in the U.S. and the world, and that's exactly what's happened.”

asked by Sara Senatore · answered by Joshua Kobza