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1. Company Snapshot

1.a. Company Description

Restaurant Brands International Inc.operates as quick service restaurant company in Canada and internationally.It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS).


The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and others.It is also involved in owning and franchising BK, a fast food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items.In addition, the company owns and franchises FHS restaurants quick service restaurants that offer subs, soft drinks, and local specialties.


As of February 15, 2022, the company had approximately 29,000 restaurants in 100 countries under the Tim Hortons, Burger King, Popeyes, And Firehouse Subs brands.Restaurant Brands International Inc.was founded in 1954 and is headquartered in Toronto, Canada.

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1.b. Last Insights on QSR

Restaurant Brands International's recent performance was driven by strong Q3 results, with revenue rising to $2.45 billion and net income reaching $315 million, fueled by sales growth in international markets and the Tim Hortons brand. The company's business streamlining efforts, including refranchising Burger King and seeking new partnerships in China, have bolstered investor confidence. Additionally, management reaffirmed its outlook for over 8% organic adjusted operating income growth through 2028. Guggenheim raised its price target on the company to $78, citing encouraging results.

1.c. Company Highlights

2. Restaurant Brands International's Q3 2025 Earnings: A Strong Performance

Restaurant Brands International delivered a robust financial performance in Q3 2025, with system-wide sales growing 6.9% and organic adjusted operating income (AOI) increasing 8.8%. The company's adjusted EPS rose to $1.03 per share, representing a 10.7% nominal growth. Notably, the actual EPS came in at $1.43, beating estimates of $1.33. The strong top-line performance was driven by comparable sales growth of 4% and net restaurant growth of 2.8%.

Publication Date: Nov -03

📋 Highlights
  • Strong Top-Line Growth:: Q3 system-wide sales rose 6.9%, driven by 4% comparable sales growth and 2.8% net restaurant growth, with organic adjusted operating income up 8.8% and EPS rising 10.7% to $1.03.
  • Tim Hortons Outperformance:: Achieved 4.2% comp sales growth, outperforming Canadian QSR by 3 points, with 6.5% breakfast food growth and 10% cold beverage sales increase from improved iced lattes.
  • International Acceleration:: Same-store sales rose 6.5%, net restaurant growth hit 5.1%, and system-wide sales surged over 12%, with Burger King China seeing 10.5% comp sales growth.
  • Financial Discipline & Returns:: Generated $566M free cash flow, returned $282M to shareholders via dividends, repaid $100M in Tim Hortons debt, and maintained a 4.4x net leverage ratio with $2.5B liquidity.
  • Challenges & Refranchising:: Popeyes U.S. comp sales fell 2%, while Burger King U.S. outperformed with 3.2% growth; 50-100 Burger King restaurants to be refranchised in 2025, and margin pressures from elevated beef costs (up high teens YoY).

Segment Performance

The company's segments performed variably, with Tim Hortons comparable sales growing 4.2%, outperforming the broader Canadian QSR industry. Burger King's U.S. comparable sales grew 3.2%, driven by the success of its Whopper By You platform. In contrast, Popeyes U.S. comparable sales declined 2%, although the brand is expected to benefit from a renewed focus on core platforms. Internationally, Burger King's performance was strong, with comparable sales growing 10.5% in China.

Margin Pressures and Cost Management

The company faced elevated beef costs, which are expected to be temporary, tied to the cyclical nature of U.S. herd rebuilding. To mitigate this, Restaurant Brands International is working with franchisees to identify efficiencies and margin opportunities. The company's focus on cost management is evident in its reduced capital expenditure guidance for 2025, now expected to be around $400 million.

Valuation and Outlook

With a P/E Ratio of 23.3 and an EV/EBITDA of 10.81, the company's valuation appears reasonable, considering its expected 8%+ organic AOI growth in 2025. Analysts estimate revenue growth of 3.8% for the next year. The company's dividend yield of 3.71% and free cash flow yield of 6.5% are also attractive. As the company continues to simplify its business model and focus on franchising, it is well-positioned for long-term success.

Growth Initiatives

Restaurant Brands International is driving growth through various initiatives, including the Crown Your Career program, which allows smaller restaurant managers to become franchisees. The company is also investing in menu innovations, such as the protein latte launch in Canada, which has shown high incrementality. With a strong brand portfolio and a focus on creating an ever-improving guest experience, the company is confident in its ability to deliver sustained growth.

3. NewsRoom

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Tims China and Tencent’s CarbonXmade Launch Innovative Eco-friendly Straw Made with Captured CO₂

Dec -03

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CMG Stock Down 35% in 6 Months: Buy the Dip or Brace for More Pain?

Dec -03

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Burger King doubles down on burgers amid chicken craze

Dec -02

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Teradyne upgraded, Circle Internet initiated: Wall Street's top analyst calls

Dec -02

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Goldman Sachs (GS) Is Up 6.7% After Securing RBI Japan Negotiation Rights and $120M Bond Issuances – What's Changed

Nov -30

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Is Restaurant Brands International’s 10% Rally Justified After Expansion News?

Nov -29

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SBUX Green Apron Gains Traction: Will Staffing Boost Traffic?

Nov -27

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.49%)

6. Segments

Tim Hortons

Expected Growth: 7%

Tim Hortons' 7% growth is driven by strategic menu innovation, successful marketing campaigns, and expansion into new markets. Additionally, the brand's focus on digital transformation, including mobile ordering and self-service kiosks, has improved customer experience and increased operational efficiency. Furthermore, the company's efforts to enhance its loyalty program and partnerships with third-party delivery services have contributed to the growth.

Burger King

Expected Growth: 9%

Burger King's 9% growth is driven by successful marketing campaigns, menu innovation, and digital transformation. The brand's focus on value, convenience, and customer experience has attracted a wider customer base. Additionally, strategic partnerships, such as the Impossible Whopper launch, have boosted sales. Expansion in high-growth markets, like Asia, and effective cost management have also contributed to the segment's growth.

International

Expected Growth: 6%

International segment growth driven by expansion in high-growth markets, strategic partnerships, and menu innovation. Strong brand recognition and marketing efforts contribute to increased brand awareness. Additionally, digital transformation and mobile ordering capabilities enhance customer experience, driving sales growth.

Popeyes

Expected Growth: 10%

Popeyes' 10% growth driven by successful menu innovation, including chicken sandwich launches, and effective marketing campaigns. Expansion in high-growth markets, such as Asia and Latin America, also contributes to growth. Additionally, digital transformation efforts, including mobile ordering and delivery, enhance customer experience and increase sales.

Firehouse Subs

Expected Growth: 5%

Firehouse Subs' 5% growth is driven by its strong brand recognition, loyalty program, and strategic expansion into new markets. The brand's focus on hot subs and sandwiches, as well as its firehouse-themed restaurants, appeals to a wide customer base. Additionally, Restaurant Brands International's resources and expertise have enabled Firehouse Subs to invest in digital transformation, improving customer experience and driving sales.

7. Detailed Products

Burger King

Fast-food restaurant chain serving burgers, fries, and other sandwiches

Tim Hortons

Coffee and baked goods chain offering breakfast sandwiches and coffee

Popeyes

Fast-food chain specializing in fried chicken and Cajun-inspired menu items

Firehouse Subs

Fast-casual sandwich chain offering hot subs and salads

8. Restaurant Brands International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Restaurant Brands International Inc. faces moderate threat from substitutes, as customers have various options for dining out or ordering in, but the company's strong brand recognition and loyalty programs help mitigate this threat.

Bargaining Power Of Customers

Restaurant Brands International Inc. faces high bargaining power from customers, as they have many options for dining out and can easily switch to competitors, but the company's loyalty programs and rewards help to retain customers.

Bargaining Power Of Suppliers

Restaurant Brands International Inc. has a low bargaining power from suppliers, as it is a large company with significant purchasing power, allowing it to negotiate favorable prices and terms with its suppliers.

Threat Of New Entrants

Restaurant Brands International Inc. faces a low threat from new entrants, as the company has a strong brand presence and significant resources, making it difficult for new competitors to enter the market and gain traction.

Intensity Of Rivalry

Restaurant Brands International Inc. operates in a highly competitive industry, with many established players, leading to a high intensity of rivalry, but the company's strong brand recognition and marketing efforts help it to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 83.51%
Debt Cost 3.95%
Equity Weight 16.49%
Equity Cost 8.58%
WACC 4.71%
Leverage 506.45%

11. Quality Control: Restaurant Brands International Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Darden

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Growth: 6.0

Quality: 5.2

Yield: 6.0

Momentum: 8.0

Volatility: 8.7

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RBI

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Quality: 5.2

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Momentum: 4.0

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Quality: 6.0

Yield: 3.0

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Quality: 5.7

Yield: 4.0

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A-Score: 4.2/10

Value: 2.5

Growth: 9.4

Quality: 6.3

Yield: 2.0

Momentum: 1.5

Volatility: 3.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

100.37$

Current Price

100.37$

Potential

-0.00%

Expected Cash-Flows