Restaurant Brands International Inc. 2026 Q3 Earnings Call

Good morning, everyone, and welcome to Restaurant Brands International's earnings call for the quarter ended September 30, 2026. Joining me on the call today are Restaurant Brands International's Executive Chairman, Patrick Doyle, CEO, Josh Kobza, and CFO, Sami Siddiqui. 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 Q4 earnings call is scheduled for the morning of February 11, 2027.

Now I'll turn the call over to Josh.

Good morning, everyone, and thank you for joining us. In Q3, we delivered 3.8% same store sales and 3% net restaurant growth, driving 6.2% system-wide sales growth and 6.7% organic adjusted operating income growth. This marks our fifth consecutive quarter of same store sales above 3%, led by strong performances from Burger King U.S. and international, and a return to solid growth at Tim Hortons. I think there are a few things driving our consistent outperformance, but two priorities stand out across our brands. The first is a persistent focus on restaurant operations. We know that consistently delivering great food and great experience is fundamental to building guest loyalty and driving sustainable growth. Where execution is already good, we're raising our standards, and where there's more work to do, we're moving with urgency to close the gaps.

The second is listening to our guests and acting on what they are telling us. That looks different across our brands, whether it is elevating the core menu at Burger King, refocusing on Popeyes signature offerings, bringing back guests favorites at Tims, or developing locally relevant innovation across our international business. The underlying principle is the same, understanding what guests value most and giving them more reasons to choose our restaurants. At the same time, we are expanding the reach of our brands around the world. This quarter, Burger King surpassed 13,000 restaurants outside the U.S. and Canada, while Popeyes crossed 2,000. These are meaningful milestones for both brands, but we are still in the early stages of realizing our full global potential. As our system grows, our increasing scale gives us more opportunities to share ideas, capabilities, and operational expertise across our markets.

Looking at the business today, I am encouraged by both the consistency of our results and the opportunities that are still ahead. We have built a lot of momentum this year and remain focused on creating long-term value for our franchisees and our shareholders. With that, let us turn to our segment highlights, starting with Tim Hortons, which represents roughly 41% of our operating profit. In Q3, Tims Canada delivered 1.8% same store sales, an encouraging improvement from the second quarter. The team executed a stronger marketing calendar, driving growth across day parts and categories. Beverages continue to be an important growth driver, with cold beverages up nearly 5% in the quarter. Our Matcha offering, which launched in July, is off to a great start.

Not only does it appeal to younger guests, but over two-thirds of Matcha beverages are sold in the P.M. daypart, helping us capture more demand where we have historically under-indexed. Almost 75% of Matcha orders include another item, supporting overall check growth. We have already expanded the platform with strawberry matcha and see significant room for further innovation. In P.M. food, we are also seeing growth led by our Melts platform and the return of our Turkey Bacon Club with honey mustard. Both offerings innovate on familiar menu items guests already know and love. We also had a delicious lineup of seasonal offerings this quarter, including the return of our popular pumpkin spice beverages and baked goods. In August, we launched a comprehensive Harry Potter Back to Hogwarts collaboration, featuring themed baked goods, cold beverages, and retail merchandise to appeal to guests of all ages.

As we add menu innovation, consistent execution remains essential. We are supporting our restaurant owners with speed of service coaching, greater visibility into restaurant cleanliness, and simpler processes so teams can deliver an even better guest experience. I saw that commitment firsthand during a recent visit to Eastern Ontario, where our restaurant owners are deeply engaged in their restaurants and their local communities. We are also growing our loyalty program through partnerships that give guests more reason to choose Tims. In September, we launched our partnership with Canadian Tire, allowing members to earn Canadian Tire Money in addition to Tims Rewards. Early account linkings are ahead of our expectations, with potential access to at least 5 million additional members. We are also partnering with another iconic Canadian brand, WestJet, to bring Tim's Flight Roast to the skies beginning next month, extending our reach to Canadians when they travel.

I'm looking forward to what we have planned through the year end, including a holiday family partnership and further innovation across Matcha and Melts. Guests can look forward to the return of more fan-favorite menu items, as well as a new loyalty partnership with WestJet in 2027. Taking a step back, Tims is performing well and delivering solid results in a tough consumer environment. I'm confident in Axel and his team's ability to build on this progress, strengthening the core and balancing relevant innovation with familiar favorites, all supported by consistent restaurant execution. Now on to our international business, which represents 29% of our operating profit. Thiago and his team delivered another good quarter with same store sales of 3.9% and net restaurant growth of 5.6%, driving system-wide sales growth of 9%. We saw particularly strong results across several of our largest markets, including Germany, Brazil, China, Japan, and Korea.

I had the opportunity to visit many of our key markets this quarter and spend time with the teams and partners driving those results. In Tokyo, I visited the Burger King Japan team, who have now delivered six consecutive quarters of double-digit same store sales. They've also developed some of the most creative and effective marketing across our system, and we brought back several ideas that are already being implemented in other markets. Burger King Korea is also performing very well, with an impressive pace of innovation driving double-digit same store sales in the third quarter. Later in the quarter, I visited Burger King in Scandinavia, including Norway and Sweden, as well as Germany, where Burger King just celebrated its 50th anniversary. Across all of these markets, I saw how investments in our restaurants and our teams are helping improve our guest experience.

Across the international business, our local teams are finding new ways to bring guests into our restaurants, from twists on our flame-grilled beef offerings to new chicken innovation. We're also increasingly taking successful ideas from one market to others, including this quarter's Dragon Ball Z partnership that we launched in over 70 markets. In September, I joined Thiago in London for the Popeyes International Convention. It was exciting to see how far the brand has come and the ambition of our franchise partners for what's next. We crossed 2,000 international restaurants this quarter and now operate in more than 50 markets, generating over $2 billion in system-wide sales. That's nearly double the sales of just two years ago and roughly seven times the level of when we acquired Popeyes in 2017.

We've come a long way in a relatively short period of time, and there is an incredible opportunity ahead of us as we work to become the world's number one chicken QSR. Finally, at BK China, our partners at CPE delivered a third consecutive quarter of double-digit same store sales, lapping double-digit growth in the prior year. This sales momentum, combined with improving unit economics, gives us confidence in accelerating development and returning to positive net restaurant growth this year. After spending so much time in our international markets this quarter, I came away with an even greater appreciation for the competitive advantage we've built with this business. Our local partners know how to win in their markets. We're increasingly bringing the best ideas across our system, and we're leveraging our established Burger King infrastructure to accelerate the growth of other brands like Popeyes.

With significant white space remaining in almost all of our largest markets, we see a long runway ahead. Turning to Burger King, which represents nearly 19% of our operating profit. After an awesome first half of the year, we accelerated our outperformance in the third quarter with U.S. same-store sales up 8.4% and system-wide sales up 7.5%. We widened our gap to Burger QSR peers to nearly 10 points, and after years of hard work, we are incredibly proud to have reclaimed the number 2 position in the U.S. burger category. Our convention in Miami this month gave us a chance to come together and celebrate that progress. What stood out to me was how determined our team and our franchisees are to keep pushing forward. There's no appetite for a victory lap or complacency.

We still see lots of opportunities in front of us, and we're very focused on capturing them. Q3 was a good example of how we're doing that, pairing core menu Elevation and family-friendly collaborations with consistent, accessible value. We continued building on the success of our elevated Whopper with popular variations like the Texas Whopper, and in September, introduced the next chapter of our culinary Elevation roadmap with upgraded Nuggets. Our new Nuggets feature crispier breading, juicier chicken, and more premium packaging, and we paired them with a revamped sauce lineup. These improvements directly address an opportunity we identified through guest feedback, and the response has exceeded our expectations. We're attracting new guests, increasing nugget incidents, and closing the gap with competitors in a category that's particularly important for kids and families.