What drove the improvement in Tims Canada through Q2, and what is the outlook for H2, considering macro and competitive environments?

Improvement was attributed to better marketing (e.g., 'melts' launch) later in the quarter. The Canadian macro environment is stable (CPI ~3%, unemployment mid-6s). H2 outlook is positive with Matcha launch (new occasion, cold beverage, PM daypart), Harry Potter partnership, breakfast innovation, and Canadian Tire loyalty program. New fountain systems enable further beverage innovation. “I think we have a tremendously good product, and it's a baseline that we can also innovate off of into the future. So we're pretty excited about that. We obviously have big expectations for our Harry Potter partnership.”

Given a potentially soft Canadian market, how will Tims Canada achieve 2%+ comps and sustainable market share gains, especially with new competitors?

Management stated the Canadian foodservice market is growing at ~3%, similar to the U.S., implying Tims' performance is controllable. They emphasized Tims' #1 value leadership, ongoing food and beverage innovation (Matcha, cold beverages, PM food), and the ability to drive sustainable growth through new dayparts and consistent offerings. “Actually, the Canadian foodservice market is doing okay. The growth rate for the overall foodservice market was in the 3% range in terms of sales for the quarter, which is very similar to the U.S. market.”

With sharpening competition and new entrants in Canada, how will Tims adapt its speed of innovation, especially in beverages, to address menu gaps and maintain its position?

Management acknowledged the competitive market but views it as normal. They believe Tims is getting faster with cold beverage innovation, citing Matcha as an example of quick national rollout and future innovation. They also highlighted the strength of the culinary team, ongoing remodels, and loyalty programs as key competitive advantages. “I think the pace of new Cold bev innovation has definitely stepped up. And I would take the Matcha launch as one of those examples. We've now launched that nationally and brought, I would say, a whole new offering and a whole new experience to many folks around Canada that were never exposed to it before.”

QSR

Restaurant Brands International (QSR) Q2 FY26 earnings call: guidance and Q&A

Q: What are the most overlooked drivers for Burger King U.S. to sustain outperformance, given the strong Q2 results and the 'early in the journey' sentiment?

Management highlighted continued tailwinds from modern image remodels (still many restaurants to update), ongoing operational improvements (despite being tied for #1 in ACSI index), and further menu elevation beyond the Whopper. They emphasized the compounding effect of these fundamental improvements and strong franchisee alignment. “As much as we've made progress on image, we still have a lot of restaurants out there that aren't modern image. So I think we still got a few years left of getting to that point we've all talked about where almost every Burger King across America is a new modern Burger King.”

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Aug 6, 2026

Source: earnings call transcript

Executive summary

Restaurant Brands International Q2 FY26 — Strong System-Wide Sales and Burger King Outperformance

Restaurant Brands International delivered strong Q2 FY26 results, driven by robust system-wide sales and double-digit adjusted EPS growth. Burger King U.S. was a standout performer, significantly outpacing the industry, while the International segment continued its consistent growth. Despite softer performance at Tim Hortons Canada and Popeyes U.S., management expressed confidence in a H2 turnaround for Popeyes and highlighted strategic initiatives across all brands, including continued investment in remodels and menu elevation.

Highlights

System-wide sales growth of 6.4% driven by 3.8% same-store sales and 2.9% net restaurant growth.
Adjusted EPS grew 12.9% to $1.07 per share, exceeding the long-term algorithm.
Burger King U.S. delivered 8.5% same-store sales, outperforming the burger QSR industry by over 9 points.
International business achieved 5.5% comparable sales and 5.1% net restaurant growth, leading to 10.7% system-wide sales growth.
Returned $435 million of capital to shareholders, including $137 million in stock buybacks, and made progress towards investment-grade leverage.

Concerns

Tim Hortons Canada comparable sales were relatively flat at +0.1%, missing growth expectations due to calendar and platform launches.
Popeyes U.S. experienced a same-store sales decline of 5.2%, resulting in negative 3.3% system-wide sales.
Anticipated $10 million headwind to AOI and $0.02-$0.03 headwind to adjusted EPS for H2 2026 due to FX rates.
Beef costs remained at all-time highs in Q2, impacting franchisee profitability, with significant relief not expected until early 2027.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year adjusted effective tax rate	18%-19% medium materiality	FY26	High
Full-year segment G&A (excluding Restaurant Holdings)	$600M-$620M medium materiality	FY26	High
Full-year net adjusted interest expense	$500M-$520M medium materiality	FY26	High
Full-year CapEx and cash inducements	around $400M medium materiality	FY26	High
Full-year Tim Hortons supply chain margins	roughly in line with 2025 levels low materiality	FY26	High
Full-year total RH AOI	roughly $10M-$20M low materiality	FY26	High
H2 2026 FX headwind to AOI	approximately $10M medium materiality	H2 2026 · FY26	High
H2 2026 FX headwind to adjusted EPS	$0.02-$0.03 medium materiality	H2 2026 · FY26	High
Net restaurant growth	accelerate medium materiality	H2 2026 · FY26	Medium
Popeyes U.S. comparable sales	return to positive comps medium materiality	H2 2026 · FY26	Medium
Full-year stock repurchases	approximately $500M high materiality	FY26	High
Net leverage ratio	low to mid-3x range high materiality	by 2028 · FY28	High
Organic adjusted operating income growth	8% high materiality	long-term	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Company-wide Strong overall performance driven by diversified portfolio and disciplined operating model. Same-store sales growth: 3.8%Net restaurant growth: 2.9%Organic adjusted operating income growth: 6.7%Adjusted EPS growth: 12.9%	—	6.4%	—	—
Tim Hortons Maintained leadership in coffee, breakfast, and baked goods. Q2 marketing did not drive expected growth, but saw improvement late in the quarter with 'melts' and cold beverages. Strong H2 calendar planned with Harry Potter campaign and loyalty partnership. Canadian same-store sales: +0.1%Gross openings (Canada FY26 target): ~80Gross openings (Canada FY25): >50Standard drive-thru restaurant paybacks: under 3 years	—	—	—	~41% of operating profit
International Growth fueled by strong execution across markets like BK Germany, Spain, Brazil, China, Korea, and Japan. Localized innovation and value offerings are key drivers. Business remains a strong long-term growth opportunity. Comparable sales: 5.5%Net restaurant growth: 5.1%Average paybacks (top 10 growth markets): ~4.5 yearsPopeyes Brazil transactions per restaurant: up >60% this yearPopeyes International comparable sales (YTD Brazil): up >20% (on top of ~20% in 2025)Burger King China comparable sales: double-digit	—	10.7%	—	~29% of operating profit
Burger King Exceptional quarter driven by multiyear elevation roadmap, including Whopper and brand elevation campaigns. Focus on service elevation with 'Your Way Champion' and 'Whopper Guarantee'. Significant opportunity remains for culinary, operational, and image improvements. Comparable sales: 8.6%U.S. same-store sales: 8.5%U.S. outperformance vs. burger QSR industry: >9 pointsWhopper platform AUVs growth (since elevation campaign): >20%Kids meal AUVs: above $28 per dayKids meal AUVs growth (since 2022): nearly 50%	—	8.2%	—	~19% of operating profit
Popeyes Sales remained soft, but management is encouraged by improvement seen. Focus on improving operations and service, refocusing on core menu, and strengthening value proposition with platforms like $5 phase and $20 family meal. Expects return to positive comps in H2 2026. U.S. net restaurant growth: 0.3%Same-store sales decline: 5.2%Product satisfaction (core offerings): improved	—	-3.3%	—	—
Firehouse Subs New steak and cheese melt well received. Announced official subpartner of Major League Baseball. Rolling out new ladder up training program for RGMs. On track to accelerate unit growth this year. Net restaurant growth: 8.1%Comparable sales growth: 0.4%	—	7.5%	—	—

QSR operating KPIs by quarter

QSR operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Change vs prior quarter
Restaurants Popeyes International	<1,500 We've grown the business from roughly 500 international restaurants to nearly 1,500 today and from around $300 million in system-wide sales to nearly $1.3 billion. Source: earnings call transcript	~1,500 We're now at about 1,500 international restaurants. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Melts	update	late May 2026
Matcha	launch	recently launched
Soda Swirls	launch	—
Harry Potter Back to Hogg Worth campaign	launch	next week
New flavors across core breakfast offerings	roadmap	later in the year
Lopper collaboration with Michelin Chef, David Lye	launch	Q2 FY26
Whole muscle Double Patty Chicken burger	update	Q2 FY26
Dessert innovation and new iced beverage platform	launch	Q2 FY26
Wild Ranch burger	launch	Q2 FY26
Mandalorian collaboration	launch	Q2 FY26
Toy Story 5 kids meal	launch	Q2 FY26
Your Way Champion and Whopper Guarantee	launch	recently introduced
Improved tender spec	update	Q2 FY26
$5 phase platform	update	introduced January
$6 big box and $20 family meal	launch	Q2 FY26
New steak and cheese melt	launch	Q2 FY26
Smoke Honeymelts	launch	recently launched
New ladder up training program for Restaurant General Managers	launch	rolling out this summer

Deals & partnerships

Canadian Tire Loyalty partnership

Allows guests to link their Triangle Rewards and Tims Rewards accounts.

Major League Baseball Official subpartner

Firehouse Subs named official subpartner of Major League Baseball across the U.S. and Canada.

S&P Ratings upgrade

Received a ratings upgrade from S&P to BB+ in May.

Risks & headwinds

FX rates and U.S. dollar appreciation second half of 2026

approximately $10M headwind to AOI and $0.02-$0.03 headwind to adjusted EPS

Beef inflation Q2 FY26, significant relief not expected until early 2027

all-time high beef costs running through the P&Ls of franchisees

Mitigation:Anticipated relief in beef costs in 2027 will improve franchisee P&Ls and support remodel acceleration.

Tim Hortons Canada marketing calendar underperformance Q2 FY26

comparable sales relatively flat at +0.1%

Mitigation:Exciting H2 marketing calendar planned, including Harry Potter campaign, new breakfast offerings, and loyalty partnership.

Popeyes U.S. soft sales Q2 FY26

same-store decline of 5.2%, system-wide sales negative 3.3%

Mitigation:Focused on improving operations, refocusing on core menu, strengthening value proposition; confident in return to positive comps in H2 2026.

What to watch in Q3 FY26

Popeyes U.S. comparable sales

H2 2026

Current -5.2%

Target positive comps

Why it matters

A return to positive comparable sales for Popeyes U.S. is critical for the brand's turnaround and overall portfolio performance.

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.

Find out whether QSR delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the most overlooked drivers for Burger King U.S. to sustain outperformance, given the strong Q2 results and the 'early in the journey' sentiment?

Management highlighted continued tailwinds from modern image remodels (still many restaurants to update), ongoing operational improvements (despite being tied for #1 in ACSI index), and further menu elevation beyond the Whopper. They emphasized the compounding effect of these fundamental improvements and strong franchisee alignment.

“As much as we've made progress on image, we still have a lot of restaurants out there that aren't modern image. So I think we still got a few years left of getting to that point we've all talked about where almost every Burger King across America is a new modern Burger King.”

asked by Brian Bittner · answered by Joshua Kobza

3 min read 6 chapters

Detailed narrative

Burger King U.S. Elevation Strategy Drives Outperformance

Burger King U.S. delivered exceptional Q2 performance with 8.5% same-store sales growth, significantly outperforming the burger QSR industry by over 9 points. This momentum is attributed to the multiyear elevation roadmap, including successful Whopper and brand elevation campaigns. Recent initiatives like the 'Your Way Champion' and 'Whopper Guarantee' aim to enhance service.

Management sees substantial runway for further culinary, operational, and image improvements, with Whopper platform AUVs increasing over 20% since the elevation campaign launch and kids meal AUVs up nearly 50% since 2022.

Tim Hortons Canada Navigates Soft Quarter with H2 Optimism

Tim Hortons Canada reported flat comparable sales of +0.1% in Q2, primarily due to a marketing calendar that did not effectively lap prior year's strong platform launches. However, performance improved towards the end of the quarter with the return of 'melts' and continued cold beverage growth.

The brand is optimistic about its H2 calendar, featuring a Harry Potter campaign, new breakfast offerings, and a loyalty partnership with Canadian Tire. The rollout of new fountain equipment is also enabling further beverage innovation like Soda Swirls.

International Segment Continues Robust Growth Trajectory

The International segment demonstrated strong and repeatable growth, achieving 5.5% comparable sales and 5.1% net restaurant growth, leading to 10.7% system-wide sales growth. This performance was fueled by strong execution in key markets such as Germany, Spain, Brazil, China, Korea, and Japan, through localized innovation and value offerings.

The segment's average paybacks are approximately 4.5 years across its top 10 growth markets, supporting continued unit expansion and making it a strong long-term growth opportunity.

Popeyes U.S. Turnaround Efforts Underway with H2 Positive Comp Expectation

Popeyes U.S. experienced a same-store sales decline of 5.2%, resulting in negative 3.3% system-wide sales. Management is actively addressing this through a focus on improving operations, refining the core menu, and strengthening value propositions. Initiatives include rolling out an improved tender spec, increasing field support, and consistent value platforms like the $5 'phase' and $20 family meal.

The company remains confident in a return to positive comparable sales in the second half of the year.

Capital Allocation and Progress Towards Investment-Grade Leverage

RBI generated $501 million in free cash flow in Q2 and returned $435 million to shareholders through dividends and share repurchases, including $137 million in stock buybacks. The company is on track to repurchase approximately $500 million for the full year.

The net leverage ratio decreased to 4.1x, and an S&P ratings upgrade to BB+ was achieved in May, marking significant progress towards the goal of achieving corporate investment-grade leverage (low to mid-3x net leverage) by 2028.

Franchisee Alignment and Accelerated Refranchising

Strong alignment with franchisees is a key driver, particularly for Burger King U.S., where franchisee investments in modern image and operations are compounding. The refranchising process for Carrols restaurants is accelerating, with several hundred expected in 2026 and the remainder in 2027, aiming to sunset the RH segment by the end of 2027.

Demand from potential buyers has more than doubled since Investor Day, indicating strong interest in the brand's momentum.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.