Skip to content
    QSR
    Earnings call· Dec 2025(Q4 FY25)

    Restaurant Brands International Q4 FY25 earnings call QSR

    Feb 12, 2026 Source

    Executive summary

    Restaurant Brands International Q4 FY25 — Consistent AOI Growth Amid Mixed Segment Performance

    Restaurant Brands International delivered a third consecutive year of strong organic adjusted operating income growth in Q4 FY25, driven by robust performance in Tim Hortons and International, alongside continued progress at Burger King U.S. despite macro headwinds. While Popeyes U.S. faced sales challenges, the company is implementing a focused turnaround strategy. Management emphasized a commitment to a simplified, franchise-heavy model and outlined plans for reaccelerated unit growth and sustained earnings momentum, with further details expected at the upcoming Investor Day.

    Highlights

    5

    • Delivered 8.3% organic adjusted operating income growth for the full year 2025, marking the third consecutive year of ~8% growth.

    • Achieved 10.7% adjusted EPS growth to $3.69 per share for the full year 2025.

    • International segment posted strong Q4 comparable sales growth of 6.1% and nearly 11% system-wide sales growth for FY25.

    • Tim Hortons Canada comparable sales grew 2.8% in Q4, outperforming the Canadian QSR industry by nearly 2 points.

    • Firehouse Subs accelerated net restaurant growth to 7.7% and delivered 8.6% system-wide sales growth for FY25.

    Concerns

    4

    • Popeyes U.S. comparable sales declined 3.2% for the full year, resulting in negative 0.7% system-wide sales growth.

    • Burger King U.S. franchisee profitability decreased to $185,000 in 2025 from $205,000 in 2024, primarily due to over 20% beef cost inflation.

    • Popeyes U.S. franchisee profitability declined to $235,000 due to softer sales performance.

    • The target of reaching 85% modern image for Burger King U.S. by 2028 will take longer due to the current cost environment.

    Guidance & targets

    17
    CategoryTargetConfidence
    Net Restaurant Growth
    Ramp back towards 5% unit growth
    high materiality
    High
    Business Model
    Return to a 99% franchise business model
    high materiality
    High
    Burger King China Restaurant Footprint
    Roughly double Burger King China's restaurant footprint to at least 2,500 units
    medium materiality
    High
    Tim Hortons Canada Development
    Accelerate development again
    low materiality
    Medium
    International Segment Growth
    Deliver durable growth
    medium materiality
    High
    Burger King U.S. Modern Image
    Reach 85% modern image
    medium materiality
    Medium
    Popeyes Performance
    Return to the level of performance it's capable of delivering
    high materiality
    High
    Organic Adjusted Operating Income Growth
    8%
    high materiality
    High
    Segment G&A (excluding Restaurant Holdings)
    $600 million to $620 million
    medium materiality
    High
    Net Adjusted Interest Expense
    $500 million to $520 million
    medium materiality
    High
    CapEx and Cash Inducements
    Around $400 million
    medium materiality
    High
    Tim Hortons Supply Chain Margins
    Roughly in line with 2025 levels
    low materiality
    High
    Tim Hortons Supply Chain Q1 Margin
    Softest of the year, in line with Q4 2025
    low materiality
    High
    BK Carrols Restaurant Level Margin
    Similar full year margins
    medium materiality
    High
    Total Restaurant Holdings AOI
    $10 million to $20 million
    medium materiality
    High
    Dividend Target
    $2.60 per share
    high materiality
    High
    Burger King China Net Restaurant Growth
    Modestly positive NRG
    low materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Tim Hortons Canada
    Outperformed the broader Canadian QSR industry by nearly 2 points in Q4. Returned to net restaurant growth for the first time since 2021. Digital ordering and payments reached all-time highs in Q4. Resilient franchisee profitability despite cost pressures.
    Average 4-wall EBITDA: CAD 295,000Breakfast food sales growth: 3.5%Baked goods growth: 2%Beverage sales growth (Q4): 3.2%Cold beverages growth (Q4): 8.6%Cold beverages as % of total beverage sales (Q4): 27%Kiosks: Over 800 restaurants
    		——2.8%—
    Tim Hortons U.S.
    Reflects continued progress in existing and new markets like Florida and Virginia.
    New restaurant openings: Highest level in the past decade
    		————
    International
    A standout year, delivering double-digit system-wide sales growth. Built five $1 billion businesses (Burger King Spain, Germany, Australia, Brazil, U.K.) and a $2 billion business (Burger King France). Burger King China showed strong comparable sales growth after operational improvements.
    Net restaurant growth (FY): 4.9%System-wide sales growth (FY): Nearly 11%Burger King China comparable sales growth (Q4): 9.2%Popeyes China net new restaurants (2025): 55Popeyes Turkey restaurants (end 2025): Nearly 500Popeyes Turkey store count growth: Doubled in last 4 yearsTim Hortons Mexico system-wide sales: Crossed $100 millionPopeyes U.K. system-wide sales: Crossed $200 millionBurger King Japan same-store sales (2025): 22%Burger King Japan same-store sales (2024): 19%Burger King Japan net new restaurants (2025): 84
    		—4.9% (FY)6.1%Mid-single-digit average royalty rate
    Burger King U.S.
    Outperformed the burger QSR industry in 9 out of the last 12 quarters. Marketing initiatives like SpongeBob SquarePants drove strong guest engagement. Franchisee profitability impacted by beef costs.
    Modern image (end 2025): 58%Modern image (2024): 51%Carrols remodels (2025): ~60Carrols sizzles (2025): 54Carrols comparable sales growth (Q4): 2.4%Franchisee profitability (2025): $185,000Franchisee profitability (2024): $205,000A operators profitability vs system average (2025): Nearly $50,000 higher
    		—1.6% (FY)2.6%—
    Popeyes U.S.
    Softer sales performance led to a decline in franchisee profitability. Leadership changes and a renewed focus on operational consistency and core products are underway.
    Net restaurant growth (FY): 1.6%System-wide sales growth (FY): -0.7%Franchisee profitability (FY): $235,000Field operations team increase: ~75%
    		—-3.2% (FY)——
    Firehouse Subs
    Solid year with accelerating net restaurant growth, particularly in Canada. Franchisee profitability grew, supporting attractive paybacks on new openings.
    Net restaurant growth (FY): 7.7%System-wide sales growth (FY): 8.6%Net new restaurants (U.S. and Canada): 104Net restaurant growth (2024): ~6%Franchisee profitability (FY): Over $100,000
    		—1.1% (FY)2.1%—

    Operational metrics

    17
    Organic Adjusted Operating Income Growth
    8.3%3rd consecutive year of ~8% growth
    FY2025

    Translated from top-line results.

    Adjusted EPS
    $3.6910.7% growth YoY
    FY2025

    Driven by AOI growth and reduced net interest expense.

    CapEx and Cash Inducements
    $365 million
    FY2025

    Total capital expenditures and tenant inducements.

    Cash Benefit from Swaps and Hedges
    $138 million
    FY2025

    Contributed to free cash flow.

    Capital Returned to Shareholders
    $1.1 billion
    FY2025

    Through dividends.

    Total Liquidity
    $2.4 billion
    End FY2025

    Includes cash and available credit.

    Cash Balance
    $1.2 billion
    End FY2025

    Part of total liquidity.

    Net Leverage Ratio
    4.2x
    End FY2025

    Successfully met low 4x target for 2025.

    Segment G&A Reduction
    $38 millionYoY decrease
    FY2025

    Primarily driven by lower stock-based compensation and headcount efficiencies.

    Net Bad Debt Expense
    $21 millionLower than $24 million in 2024
    FY2025

    Modestly lower year-over-year.

    Burger King China Royalty Revenues
    $32 million
    2024

    Recognized in 2024 before classification as held for sale in 2025.

    Burger King U.S. Commodity Inflation
    7%
    FY2025

    Largely due to beef costs.

    Beef Cost Inflation (Burger King U.S.)
    >20%
    FY2025

    Primary driver of commodity inflation and franchisee profitability decline.

    Carrols Restaurant Level Margin
    11.1%
    FY2025

    Impacted by commodity inflation.

    Burger King Refranchised Restaurants
    >100Exceeded 50-100 guidance
    2025

    Part of the plan to simplify the business model.

    Tim Hortons Holiday Smile Cookie Campaign
    CAD 13 million
    Q4 2025

    Raised for local charities and Tim's Foundation camps.

    Popeyes System-Wide Sales Outside U.S.
    $1.7 billionUp from $927 million in CY2023
    FY2025

    Strong growth in international markets for Popeyes.

    Industry KPIs

    8
    MetricValueDetails
    Fee revenue streamsMid-single-digit%
    Comparable sales comps2.4%%
    Global system wide sales5.3%%
    Franchisee financial healthCAD 295,000CAD
    Input cost inflation hedging>20%%
    Value affordability positioning—
    Loyalty program members tier mix7 millionmembers
    Net unit growth development pipeline2.9%%

    Product announcements

    3
    ProductTypeDetails
    SpongeBob SquarePants menulaunch
    New espresso machinesexpansion
    Loyalty partnership with Canadian Tirelaunch

    Deals & partnerships

    1
    CPEjoint venture$350 million (primary capital injection)

    Acquired substantially all remaining equity interest in Burger King China from joint venture partners. Ambition to roughly double Burger King China's restaurant footprint to at least 2,500 units by 2030.

    Risks & headwinds

    7
    Tougher consumer backdrop and macro uncertainty2025, expected similar in 2026

    Impacted P&Ls, weighed on confidence across many markets.

    Mitigation: Focus on basics, long-term investments, and strengthening brands.

    Beef cost inflation for Burger King U.S.FY2025, relief likely closer to H2 2026

    Increased over 20% for the full year 2025, causing franchisee profitability to step back.

    Mitigation: Believed to be cyclical, tied to U.S. herd rebuilding, tariff impacts, and upstream labor shortages. Focus on driving strong top-line results and improving areas under control.

    Current cost environment impacting remodel paceBeyond 2028

    Will take longer to reach 85% modern image for Burger King U.S. (previously targeted 2028).

    Mitigation: Strategy and role of remodels remain unchanged; steady progress will continue alongside franchisees.

    Softer sales at Popeyes U.S.FY2025

    Comparable sales down 3.2% for the year, resulting in negative 0.7% system-wide sales growth and reduced franchisee profitability to $235,000.

    Mitigation: Leadership changes, renewed focus on operational consistency, field engagement, and sharpening core product focus.

    Weather impact on Carrols restaurantsQ4 2025

    Carrols comparable sales grew 2.4% in Q4, slightly behind the rest of the system.

    Mitigation: Not explicitly stated, but geographic concentration in the Northeast was a factor.

    Elevated coffee costs and tariff-related headwinds for Tim Hortons CanadaFY2025

    Impacted P&Ls.

    Mitigation: Solid top-line sales performance helped offset these headwinds, maintaining resilient average 4-wall EBITDA.

    Tim Hortons supply chain Q1 margin softnessQ1 FY2026

    Expected to be the softest of the year, in line with Q4 2025.

    Mitigation: Not explicitly stated, but overall supply chain margins for 2026 are expected to be in line with 2025 levels.

    Q&A highlights

    9

    How does RBI view comparable sales evolution for 2026, particularly for Tim Hortons and Burger King? What are the next steps for Tim Hortons' PM expansion given strong beverage growth but modest PM food growth?

    Management expects a similar consumer environment in 2026 to 2025, with a focus on fundamentals. Tim Hortons saw strong cold beverage growth, reaching its highest Q4 mix ever, and plans more innovation. PM food expansion is viewed as a long-term initiative, with continued menu refinement and operational focus to build habits beyond morning dayparts.

    “I think we've always viewed our efforts to move into the PM as a long-term initiative, something that will take a lot of years.”

    asked by Danilo Gargiulo · answered by Joshua Kobza

    2 min read7 chapters

    Detailed Narrative

    01

    Strategic Focus and Investor Day

    Restaurant Brands International is preparing for its Investor Day on February 26, which marks the midpoint of its long-term growth algorithm. The event will provide updates on the 'Reclaim the Flame' program, the path to 5% plus net restaurant growth, plans to return to a 99% franchise business model, and capital allocation strategies. This call primarily focused on Q4 and full-year 2025 results, with forward-looking plans reserved for the Investor Day.

    02

    Burger King China Joint Venture

    The company announced a joint venture with CPE, an experienced Chinese investment firm, for Burger King China. The transaction closed on January 30, 2026, with CPE injecting $350 million of primary capital to fund growth. The ambition is to roughly double Burger King China's restaurant footprint to at least 2,500 units by 2030, building on three consecutive quarters of positive same-store sales in 2025.

    03

    Popeyes Turnaround Efforts

    Following weaker performance, Popeyes U.S. saw a leadership change with Peter Perdue appointed President. The turnaround strategy focuses on improving operational consistency, expanding field engagement by approximately 75%, and sharpening the core product focus on hand-battered bone-in chicken, tenders, and sandwiches. Management expressed confidence in the brand's underlying strength and its ability to return to stronger performance.

    04

    Tim Hortons Canada Performance

    Tim Hortons Canada delivered solid performance, with Q4 comparable sales growing 2.8%, outperforming the broader Canadian QSR industry. The brand saw strong growth in cold beverages (up 8.6% in Q4) and returned to net restaurant growth in Canada for the first time since 2021. Digital engagement reached all-time highs, and a new loyalty partnership with Canadian Tire is planned for 2026 to further drive adoption.

    05

    International Segment Strength

    The International segment was a standout performer, delivering 6.1% comparable sales growth in Q4 and nearly 11% system-wide sales growth for the full year. This growth was broad-based, with strong performance in markets like France, Australia, and Brazil. The company has built five $1 billion businesses and a $2 billion business in Burger King France, with consistent success in markets like Burger King Japan and Popeyes Turkey.

    06

    Burger King U.S. Reclaim the Flame Progress

    Burger King U.S. comparable sales grew 2.6% in Q4, outperforming the burger QSR industry in 9 of the last 12 quarters. Marketing initiatives like the SpongeBob SquarePants menu drove strong guest engagement and brought families back. The brand maintained consistent value platforms ($5 Duos, $7 Trios) and continued operational improvements, with 58% of assets now in a modern image, up from 51% in 2024.

    07

    Franchisee Profitability Dynamics

    Franchisee profitability varied across brands. Tim Hortons Canada maintained resilient average 4-wall EBITDA of CAD 295,000 despite cost pressures. Burger King U.S. profitability declined to $185,000 due to over 20% beef cost inflation. Popeyes U.S. profitability decreased to $235,000 due to softer sales. Firehouse Subs saw profitability grow to over $100,000, supporting attractive new unit paybacks of 3-3.5 years.

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