Restaurant Brands International held a productive session Tuesday at Barclays' 19th Annual Global Consumer Conference, with CEO Josh Kobza and CFO Sami Siddiqui detailing a turnaround that management says is accelerating across the company's Burger King, Tim Hortons and Popeyes brands.
On a year-to-date basis, RBI reported aggregate comparable sales rose 3.5% and operating income grew 8.5%, both outpacing the company's own long-term framework of 3%+ comp sales growth and 8%+ operating income growth. Kobza pointed to Burger King U.S., which posted same-store sales growth of 8.5% in the second quarter, as evidence the brand's "Reclaim the Flame" strategy is delivering results. About half of the U.S. Burger King system has been remodeled so far, with roughly 40% remaining, and approximately 1,000 restaurants still need to be refranchised to new operators.
Tim Hortons, meanwhile, continues to dominate its morning window. Nearly half of the chain's business occurs before 11 a.m., and during peak hours between 6 and 10 a.m., drive-throughs are moving a vehicle every 23 seconds. The brand launched a Harry Potter-licensed merchandise and food collaboration this season alongside a matcha product line.
Popeyes faces a more challenging path but management expects the brand to return to positive comparable sales in the second half of 2024. Peter, formerly Burger King's COO and now Popeyes president, remains at the helm of the turnaround. The brand maintains its $5 Faves value platform and continues to focus on three core categories: bone-in chicken, tenders and chicken sandwiches. Popeyes accounts for slightly more than half of RBI's restaurant count and is approaching half of system sales, with the international portfolio covering more than 125 markets.
Looking ahead, Kobza reiterated RBI's 2028 framework: system sales growth of 8%+ annually, supported by 3%+ comparable sales growth and 5%+ net unit growth. The company targets approximately 1,800 net new units by 2028, with net leverage declining to the low to mid-3x range. For 2024 alone, RBI set aside about $500 million for share repurchases.
International markets were a focal point. Japan stands out as a prime example — the country grew from fewer than 100 Burger King restaurants a decade ago to around 400 today, with a target of roughly 600 locations within two years. Unlevered payback periods in Japan have compressed to about 2.5 years, and Kobza described same-store sales as growing at "double digits on double digits on double digits." In China, RBI took operational control of Burger King China and partnered with local operator CPE, expecting to contribute approximately 200 net new units by 2028. Other top growth markets explicitly highlighted included France and India.
On the balance sheet, S&P and Fitch rate RBI's first-lien debt as investment grade, one notch away from full corporate investment grade, while Moody's recently upgraded the company, moving it closer to that threshold. InvestingPro rated the company's financial health as "GOOD."
RBI's QSR stock traded near $77.56, giving the company a market capitalization of approximately $35.3 billion. LTM revenue growth stood at 6.5%, with a P/E ratio of 19.7 and a PEG ratio of 0.49. The company raised its dividend for 11 consecutive years — more than 50 straight quarters — with a current yield of 3.3% and a payout ratio of about 60% of earnings.
Burger King U.S. accounts for roughly 17% of RBI's operating income, while the international segment is approaching half of both restaurant count and system sales, growing at double-digit rates in both sales and operating income. At the product level, Burger King introduced new full white-meat chicken nuggets with a crispier coating, a Dragon Ball Z partnership featuring "Super Saiyan Sauce," and continued its summer service programs including the Whopper Guarantee and "Your Way Champion" initiative. Value offerings include $5 duos and $7 trios, with value menu items representing about 30% of the U.S. Burger King menu.
