Restaurant Brands International Inc. 2026 Q2 Earnings Call

Please go ahead. Thank you, operator.

Good morning, everyone. Welcome to Restaurant Brands International's earnings call for the quarter ended June 30th, 2026. Joining me on the call today are Restaurant Brands International's Executive Chairman, Patrick Doyle, CEO, Josh, and CFO, Sami. Following remarks from Josh, Sami, and Patrick, we will open the call to questions. Today's discussion may include forward-looking statements, which are subject to risks detailed in the press release issued this morning and in our SEC filings. We will also reference non-GAAP financial measures, reconciliations of which can be found in the press release and trending schedules available on our website. As a reminder, organic Adjusted Operating Income growth is on a constant currency basis and excludes results from the Restaurant Holdings segment. For calendar planning purposes, our preliminary Q3 earnings call is scheduled for the morning of October 29th, 2026.

Now, I'll turn the call over to Josh.

Thank you, Kendall. Good morning, everyone. Q2 was another strong quarter. We delivered 3.8% same-store sales growth and 2.9% net restaurant growth, driving 6.4% system-wide sales growth, 6.7% organic Adjusted Operating Income growth, and 12.9% Adjusted EPS growth. Last quarter, we said our results were early proof that the 2028 vision we laid out at our Investor Day was taking hold. Q2 built on that momentum. We accelerated same-store sales, exceeding our long-term 3% algorithm for the third consecutive quarter, delivered double-digit earnings growth, and returned $435 million of capital to shareholders. We also advanced our other key priorities, strengthening our path to becoming an investment-grade company and making progress towards 5% net restaurant growth, all while being the partner of choice for the best franchisees and the employer of choice for the best talent.

Just as importantly, our results highlight the strength of our diversified portfolio and disciplined operating model. By investing behind each of our brands while executing consistently against our long-term strategies, we've built a portfolio capable of delivering durable top-line and earnings growth across a variety of consumer environments. Those strategies continue to drive results, with Tim Hortons and International each delivering their 21st consecutive quarters of positive same-store sales growth. Burger King U.S. was a standout performer this quarter, with our elevation strategy driving another major step forward in sales and expanding our outperformance versus the industry to the high single digits. I'm incredibly proud of what our teams and franchisees have accomplished so far this year. Through the first half of 2026, we have delivered above algorithm same-store sales of 3.5% and organic Adjusted Operating Income growth of 8.5%, along with nearly 14% Adjusted EPS growth.

These results highlight the power of strong alignment with our franchisees and consistent execution every day in our restaurants. We're excited about the opportunities still ahead as we look to build on this momentum in the second half of the year. With that, let's turn to our segment results, starting with Tim Hortons, which represents roughly 41% of our operating profits. At Tim Hortons, Canadian same-store sales were relatively flat at +0.1%. While we maintained our leadership positions in coffee, breakfast, and baked goods, our calendar didn't drive the growth we've come to expect from Tims and was unable to lap last year's major platform launches. However, there were encouraging signs as the quarter progressed. In late May, we introduced Melts, one of the most requested items that guests wanted to return to the menu, and we saw continued growth in cold beverages.

As we look ahead, Axel and the team have an exciting marketing calendar, kicking off next week with our Harry Potter: Back to Hogwarts campaign, featuring magical baked goods and beverages designed to appeal to fans of all ages and celebrate 25 years since the release of the first film. We'll follow this with new flavors across our core breakfast offerings and an exciting holiday partnership later in the year. Our recent matcha launch also unlocks an entirely new beverage innovation opportunity, while the continued rollout of fountain equipment is enabling us to further expand our cold beverage offerings, like Soda Swirls, which is Tims version of a dirty soda, while also improving back-of-house efficiency.

We're also excited about our upcoming loyalty partnership with Canadian Tire, which will allow guests to link their Triangle Rewards and Tims Rewards accounts, earning Canadian Tire money with every Tims transaction and extending the reach of our digital ecosystem through one of Canada's largest loyalty programs. Beyond marketing, we're on track to accelerate development in Canada with approximately 80 gross openings this year compared to over 50 last year, spanning every Canadian province, including Ontario, Alberta, and Quebec. These will primarily be standard drive-through restaurants, which deliver paybacks of under three years, one of the strongest in the industry. And just as importantly, our restaurants continue to make a meaningful impact on the communities that they serve. This year's Smile Cookie campaign raised a record $23 million for more than 600 charities and community organizations across Canada and the U.S.

In July, our annual Camp Day raised nearly $13 million to support Tims Foundation Camps. Taking a step back, while our marketing did not perform as anticipated in Q2, we were encouraged by stronger business performance as the quarter progressed, and are excited about the back half calendar. Tim Hortons remains one of the strongest and most loved restaurant brands in Canada. Canadians continue to rank us number one in brand trust and affordable pricing, a testament to the unique role Tims plays in the everyday lives of our guests. We're focused on building on those strengths by delivering delicious food and beverages, reliable everyday value, and a great experience to our guests. I'm confident these fundamentals position us well for the years ahead.

On to our international business, which drives roughly 29% of our operating profit and remains one of the most important growth engines of the business. This quarter, international delivered comparable sales of 5.5% and net restaurant growth of 5.1%, resulting in system-wide sales of 10.7%. Growth was fueled by strong execution across many of our largest markets, including BK Germany, Spain, Brazil, China, Korea, and Japan. Our teams continue to launch exciting innovation tailored to local preferences across both our core offerings, as well as emerging platforms like chicken and beverages. At Burger King China, value chicken innovation, an exciting Whopper collaboration with Michelin chef David Lai, and the continued success of our whole muscle double patty chicken burger drove another great quarter of results. Germany's strong performance was supported by dessert innovation and a new iced beverage platform. While in Spain, guests enjoyed our new Wild Ranch Burger.

These innovations were complemented by a variety of family partnerships around the world. Our Mandalorian collaboration extended across over 70 markets, including Spain, Germany, and the U.K. While our Toy Story 5 kids meal helped drive traffic in countries like Brazil and Argentina. Underpinning all of this is a strong base of everyday value, creating a balanced offering for guests across a wide range of occasions. Earlier in the quarter, Thiago and his team hosted their annual Burger King CEO Summit in France, bringing together leaders across the global Burger King system. Together, we aligned on priorities to drive long-term growth, strengthening restaurant operations, simplifying our technology platforms, and improving unit economics. Those priorities continue to translate into results, with average paybacks of around 4.5 years across our top 10 growth markets. We remain committed to improving those over time.

Delivering attractive returns supports new unit growth and market expansion, such as the recent successful launch of Firehouse Subs in Australia. In July, I visited our Firehouse business in Brazil with Thiago, Yuri, and our local team, where transactions per restaurant are up over 60% just this year. While in Brazil, we also toured Burger King and Popeyes restaurants. Popeyes continues to perform very well, with comparable sales up over 20% year-to-date, on top of roughly 20% growth in 2025, resulting in improving unit economics. Meanwhile, our Burger King team has accelerated investments in restaurant image and operations, and they're seeing incredible results there so far. I'm also very encouraged by Burger King's performance in China under CPE's leadership. The team has hit the ground running. With another quarter of double-digit comparable sales and a sequential improvement in unit economics.

Their operational expertise, local market knowledge, and fast pace of execution are very exciting to see, especially given the important role Burger King China plays in our path back to 5% net restaurant growth. International's performance in Q2 once again demonstrated that our growth is broad-based and repeatable. Across markets, our experienced local teams are executing a proven playbook that continues to generate attractive results in a wide range of consumer environments. After more than four years of consistent outperformance, this business remains one of the strongest long-term growth opportunities across our portfolio. Moving now to Burger King, which represents nearly 19% of our operating profit. The business delivered another exceptional quarter, with comparable sales of 8.6% driving system-wide sales growth of 8.2%.