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    QSR
    Earnings call· Sep 2025(Q3 FY25)

    Restaurant Brands International Inc. QSR

    Oct 30, 2025 Source

    Executive summary

    Restaurant Brands International Q3 FY25 — Strong Performance Driven by Tim Hortons and International Growth

    Restaurant Brands International delivered a strong Q3 FY25, with robust comparable sales and organic AOI growth, primarily fueled by consistent performance at Tim Hortons Canada and accelerated growth in its international segment. The Burger King U.S. turnaround continues to gain traction, outperforming the QSR burger category, while Popeyes U.S. faces challenges with softer sales. The company remains focused on simplifying its business model through refranchising and strategic divestitures, aiming for sustained long-term free cash flow generation.

    Highlights

    5

    • Comparable sales were up 4% across the portfolio in Q3 FY25.

    • System-wide sales grew 6.9% in Q3 FY25.

    • Organic adjusted operating income grew 8.8% in Q3 FY25.

    • Nominal adjusted EPS increased 10.7% to $1.03 per share in Q3 FY25.

    • Tim Hortons Canada comparable sales grew 4.2% in Q3 FY25, outperforming the broader Canadian QSR industry by 3 points.

    Concerns

    4

    • Popeyes U.S. comparable sales were down 2% in Q3 FY25.

    • Elevated beef costs are creating short-term margin pressures for Burger King U.S. franchisees, with prices up high teens year-to-date.

    • Early-stage investments at Popeyes China and Firehouse Brazil resulted in a net AOI drag of $7 million in Q3 FY25.

    • October has started out a bit choppier in the U.S. for consumer trends.

    Guidance & targets

    9
    CategoryTargetConfidence
    Organic adjusted operating income growth
    at least 8%
    high materiality
    High
    Adjusted effective tax rate
    18% to 19%
    medium materiality
    High
    CapEx and cash inducements
    around $400 million
    medium materiality
    High
    Adjusted net interest expense
    around $520 million
    medium materiality
    High
    Net restaurant growth
    around 3%
    medium materiality
    High
    Tim Hortons supply chain margins
    around 19%
    medium materiality
    High
    Tim Hortons supply chain margins
    mid-17%
    medium materiality
    High
    Segment G&A (excluding restaurant holdings)
    low end of $600 million to $620 million
    medium materiality
    High
    Burger King restaurant refranchising
    between 50 and 100 restaurants
    medium materiality
    High

    Segment performance

    8
    SegmentRevenueYoYQoQMargin
    Tim Hortons Canada
    Consistent performer and contributor to RBI's growth, exemplifying strong fundamentals and innovation. Outperformed broader Canadian QSR industry by roughly 3 points. Guest satisfaction at record highs, speed of service improved across every daypart.
    Comparable sales growth: 4.2%Breakfast foods growth: 6.5%Total beverage sales growth: 4%Cold beverages growth: 10%Kiosk installations by year-end: ~800 restaurantsActive Tims reward members: >7 millionLoyalty member spend uplift: ~50% moreNet restaurant growth: modest (on track to return to)
    		————
    International Business
    Accelerated meaningfully this quarter, reflecting strength of global franchise network and balanced playbook. Outperformed industry in several key markets including France, U.K., Spain, and Germany.
    Same-store sales growth: 6.5%Net restaurant growth: 5.1%System-wide sales growth: >12%Burger King U.K. system-wide sales: >$1 billionBurger King U.K. sales growth (last 12 months): >$115 millionPopeyes U.K. restaurants by November: 100Popeyes EMEA restaurants: >1,000Popeyes Turkey restaurants by year-end: ~500 (100 opened this year)Popeyes system-wide sales growth: >35% (among world's top 10 Western QSR brands outside U.S.)
    		————
    Burger King China
    Making significant progress with results exceeding expectations, momentum building throughout the quarter, and unit economics improving quarter-over-quarter. Classified as held for sale and reported as discontinued operations.
    Comparable sales growth: 10.5%
    		————
    Popeyes China
    Continues to perform well and remains on track for development.
    Restaurants to open this year: ~50
    		————
    Burger King U.S.
    Making meaningful strides strengthening value proposition, improving operations, and modernizing the restaurant experience. Consistently outperformed the Burger QSR category for many quarters.
    Comparable sales growth: 3.2%Remodels in 2025: ~400Average restaurant sales post remodel: ~$2 millionModern image percentage (end of year): high 50s%Modern image target: ~85% by end of 2028
    		————
    Carrols (Burger King U.S.)
    Performance again outpaced the system, with remodels delivering uplifts ahead of the system average, reflecting the success of the new image.
    Comparable sales growth: 4.8%
    		————
    Popeyes U.S.
    Results were softer this quarter. Limited time offers drove trial but repeat visitation fell short. Management is not satisfied and is reprioritizing resources to support franchisees and focus on core offerings.
    Net restaurant growth: 1.9%System-wide sales growth: 0.9%
    		—-2%——
    Firehouse Subs
    Delivered a solid quarter, reflecting continued progress in expanding footprint across North America. On track for another year of accelerating development in 2025.
    Comparable sales growth: 2.6%Net restaurant growth: 7.7%System-wide sales growth: 10.7%Net new restaurants (past 12 months): 100
    		————

    Operational metrics

    25
    System-wide sales growth
    6.9%
    Q3 FY25

    Company-wide performance.

    Organic adjusted operating income growth
    8.8%
    Q3 FY25

    Drove faster growth than system-wide sales due to operating leverage.

    Nominal adjusted EPS growth
    10.7%
    Q3 FY25

    Adjusted EPS increased to $1.03 per share from $0.93 last year.

    Segment G&A reduction
    $8 millionYoY
    Q3 FY25

    Contributed to operating leverage.

    Adjusted net interest expense decrease
    $14 millionYoY
    Q3 FY25

    Reflecting benefits of 2024 refinancing activities and cross currency swaps.

    Adjusted effective tax rate
    17.8%
    Q3 FY25

    Year-to-date rate is 18.1%.

    Capital returned to shareholders
    $282 million
    Q3 FY25

    Returned through dividend.

    Total liquidity
    $2.5 billion
    Q3 FY25 end

    As of end of Q3 FY25.

    Net leverage ratio
    4.4x
    Q3 FY25 end

    As of end of Q3 FY25.

    Beef costs increase
    high teensvs last year
    YTD 2025

    Elevated beef costs creating short-term margin pressures for Burger King U.S. franchisees.

    BK China AOI drag
    $8 millionYoY headwind
    Q3 FY25

    Year-over-year adjusted operating income headwind.

    Early-stage investments AOI drag
    $7 million
    Q3 FY25

    Net AOI drag within Restaurant Holdings, expected to have similar impact in Q4.

    BK Fuel to Flame ad fund expense
    $41 million
    Q4 FY24

    Lapping this expense in Q4 FY25 will provide a net benefit.

    Net bad debt expenses
    $20 million
    Q4 FY24

    Lapping this expense in Q4 FY25 will provide a net benefit.

    BK China revenues
    $9 million
    Q4 FY24

    Lapping these revenues in Q4 FY25 will partially offset the net benefit from other items.

    Tim Hortons Canada kiosk installations
    800
    by year-end

    On track to reach this number, driving higher average checks and strong adoption among younger guests.

    Tim Hortons Canada active Tims reward members
    7 million
    Q3 FY25

    Members spend about 50% more on average than before joining.

    Popeyes U.K. restaurant count
    100
    November

    Set to open its 100th restaurant in November, 4 years after its debut.

    Popeyes EMEA restaurant count
    1,000
    Q3 FY25

    Popeyes is seeing strong traction across EMEA.

    Popeyes Turkey restaurant count
    500
    by year-end

    The team will open 100 restaurants this year, reaching nearly 500 locations.

    Burger King U.S. remodels
    400
    FY25

    Still expected for the year, despite commodity cycle impacts.

    Burger King U.S. remodel average restaurant sales uplift
    $2 million
    post remodel

    Remodeled restaurants having strong uplifts in net of control and average restaurant sales.

    Burger King U.S. modern image percentage
    high 50s%
    end of FY25

    Expected to end the year around this percentage of the portfolio.

    Burger King U.S. modern image target
    85%
    by end of 2028

    Long-term vision and plan to get to this percentage of the system on modern image.

    Firehouse Subs net new restaurants
    100
    past 12 months

    Opened over the past 12 months, accelerating development.

    Industry KPIs

    3
    MetricValueDetails
    Comparable sales comps4%%
    Global system wide sales6.9%%
    Net unit growth development pipeline2.8%%

    Product announcements

    11
    ProductTypeDetails
    Loaded Croissant breakfast sandwichlaunch
    Spice vanilla filled donut and Halloween Timbits bucketlaunch
    Thanksgiving stacklaunch
    Improved iced lattesupdate
    Chai Lattes, Pumpkin Spice, and new protein latteslaunch
    Baby burger boxeslaunch
    Gordon Ramsay Wagyu burgerlaunch
    Naruto cross-market promotionlaunch
    Crisper chicken burgerlaunch
    Barbecue Brisket and Crispy Onion Whopperslaunch
    Monster menulaunch

    Deals & partnerships

    4
    Burger King China joint venture partnersAcquired substantially all remaining equity interest in Burger King China.

    Acquisition completed on February 14, 2025. Actively working to identify a new controlling shareholder.

    Canadian TireNew loyalty partnership for Tim Hortons.

    Allows guests to link rewards accounts and unlock more benefits. Launching in late 2026.

    Morgan StanleyEngaged to sell Burger King China.

    Actively engaged with Morgan Stanley to find a new local partner for Burger King China.

    Crown Your Career program participantsRefranchising Burger King restaurants through a program for smaller operators.1 to 3 years (program duration)

    About half of the 50-100 refranchisings in 2025 will be through this program. Participants are typically restaurant managers with less capital, focused on running small portfolios.

    Risks & headwinds

    5
    Tougher consumer environmentQ3 FY25

    Comparable sales up 4% in Q3 FY25 despite this environment.

    Mitigation: Strategy focusing on brand strength, dedication of teams and franchisees, and value delivery to guests.

    Elevated beef costs for Burger King U.S. franchiseesFY25

    Beef prices up high teens year-to-date, equating to a mid- to high single-digit increase in the overall commodity basket for Burger King U.S. in 2025.

    Mitigation: Working closely with franchisees to identify efficiencies and margin opportunities; optimistic prices will normalize over time due to cyclical nature of U.S. herd rebuilding and potential trade deals.

    Softer Popeyes U.S. performanceQ3 FY25

    Comparable sales down 2% and system-wide sales growth of 0.9% in Q3 FY25.

    Mitigation: Reprioritizing resources to support franchisees, focusing investments on restaurant and equipment upgrades, ensuring new units are opened exclusively with top operators, and shifting focus to core offerings and consistent value.

    Early-stage investments creating AOI dragQ3 FY25, Q4 FY25

    Net AOI drag of $7 million in Q3 FY25.

    Mitigation: These expenses are anticipated to continue until ownership transitions to new local partners for Popeyes China and Firehouse Brazil.

    Choppier U.S. trend in OctoberOctober 2025

    Directional, not quantified.

    Mitigation: No change to overall plans due to the large global and diversified business where 70% of AOI is generated outside the U.S.

    What to watch in Q4 FY25

    5

    Burger King U.S. 2026 remodel schedule

    Q4 FY25 earnings call / early 2026
    Current400 remodels expected in 2025
    TargetSpecific number of remodels for 2026

    Why it matters

    The pace of remodels is key to the Burger King U.S. turnaround and franchisee profitability, especially given fluctuating beef costs.

    And I think in terms of 2026 remodel numbers, I don't think we're ready to put a number out there quite yet, something we'll probably look at doing once we get into the beginning of the year, maybe the Q4 earnings call.

    Q&A highlights

    10

    Can you elaborate on the Burger King U.S. turnaround trajectory and draw parallels to the Tim Hortons turnaround, highlighting future opportunities?

    Management is pleased with the consistent outperformance of Burger King U.S. against the QSR burger segment, attributing it to addressing franchisee and guest needs for modern assets, consistent operations, and profitability. The strategy focuses on the Whopper, family engagement, and consistent value offerings. They see parallels with the Tim Hortons turnaround in terms of execution, franchisee economics, and consistent value, aiming for sustained positive comps.

    “Yes, Dennis, I think that the parallel though is exactly right. I mean what we did at Tims in Canada is exactly the same thing we're doing at Burger King.”

    asked by Dennis Geiger · answered by Joshua Kobza

    3 min read6 chapters

    Detailed Narrative

    01

    Tim Hortons Canada Sustained Growth and Innovation

    Tim Hortons Canada continues its strong performance, with comparable sales growing 4.2% in Q3 FY25, outperforming the Canadian QSR industry by approximately 3 points. This growth was driven by a 6.5% increase in breakfast foods, new product launches like the Loaded Croissant, and a 4% rise in total beverage sales, including 10% growth in cold beverages. The brand is expanding its PM daypart menu and advancing digital initiatives, with kiosk installations on track for 800 restaurants by year-end and a new loyalty partnership with Canadian Tire launching in late 2026.

    02

    International Business Accelerates System-Wide Sales

    The international business accelerated significantly in Q3 FY25, with same-store sales up 6.5% and net restaurant growth of 5.1%, driving system-wide sales growth of over 12%. Key markets like France, the U.K., Spain, and Germany outperformed the industry. Burger King U.K. surpassed $1 billion in system-wide sales, adding over $115 million in the last 12 months. Popeyes is expanding rapidly in EMEA, with 100 new restaurants expected in Turkey this year, reaching nearly 500 locations. Burger King China saw comparable sales grow 10.5% with improving unit economics, reinforcing its high potential.

    03

    Burger King U.S. Turnaround Momentum

    Burger King U.S. comparable sales grew 3.2% in Q3 FY25, consistently outperforming the Burger QSR category. The 'Reclaim the Flame' plan, focusing on menu innovation, operational improvements, and modernizing restaurants, is showing results. The Whopper By You platform and value offerings like $5 Duos and $7 Trios are resonating with guests. Operational surveys show improved guest satisfaction and revisit intent. The system is on track for approximately 400 remodels in 2025, with remodeled restaurants showing strong sales uplifts, including a 4.8% comp at Carrols.

    04

    Popeyes U.S. Performance and Strategic Adjustments

    Popeyes U.S. experienced softer results in Q3 FY25, with comparable sales down 2% and system-wide sales growth of 0.9%. Management acknowledged dissatisfaction with the performance, noting that limited-time offers drove trial but lacked repeat visitation, and a wings revamp was only modestly incremental. The team is reprioritizing resources to focus on core offerings (bone-in chicken, tenders, sandwich platforms), consistent value, and operational improvements, including restaurant and equipment upgrades and opening new units with top operators. Despite current challenges, confidence remains in the brand's long-term potential.

    05

    Firehouse Subs Rapid Expansion

    Firehouse Subs delivered a solid quarter with comparable sales up 2.6% and net restaurant growth of 7.7%, leading to 10.7% system-wide sales growth. The brand opened 100 net new restaurants over the past 12 months, a five-fold increase from its acquisition pace. This expansion is supported by enthusiastic franchisees, solid paybacks, and growing brand awareness, keeping the brand on track for another year of accelerating development in 2025.

    06

    Capital Allocation and Business Simplification

    RBI generated $566 million in free cash flow in Q3 FY25, returning $282 million to shareholders via dividends and fully repaying a $100 million Tim Hortons facility. The company ended the quarter with $2.5 billion in liquidity and a net leverage ratio of 4.4x. Strategic priorities include investing in the business, maintaining dividends, and reducing leverage. RBI is refranchising 50-100 Burger King restaurants in 2025, with half through the Crown Your Career program, and is actively working to sell Burger King China to simplify its structure and create a more capital-light platform.

    AI-generated summary of the company’s earnings call. Not investment advice.