CANADA, Oakville, Ontario. Same-store sales growth at Burger King and Popeyes Louisiana Kitchen drove first quarter earnings beyond analysts’ forecasts at parent company Restaurant Brands International Inc. (RBI).
Under new accounting standards, same-store sales at Burger King advanced 3.8%, while the Popeyes business reported same-store sales growth of 3.2% for the first quarter ended 31 March, 2018.
Results were soft at the company’s Tim Hortons unit which reported a 0.3% decline in same-store sales. The impact of negative publicity surrounding the unit’s response to minimum wage increases in Canada weighed on earnings during the quarter. Many Tim Hortons franchises scaled back employee benefits after the province of Ontario raised the minimum wage. RBI announced a plan to bolster the chain’s image.
“During the first quarter, we continued to grow system-wide sales for each of our three iconic brands, and we have developed strong plans with our partners to further accelerate growth for the long term,” said Daniel Schwartz, CEO of Restaurant Brands. “At Tim Hortons, though results were soft, we have high conviction that our ‘Winning Together’ plan unveiled today will improve guest experience and drive sales and profitability for our restaurant owners. For Burger King, we built upon our recent sales momentum and further accelerated our net restaurant growth. At Popeyes, we improved comparable sales in the US, and announced our first international development agreement for the brand in Brazil.
“We continue to see a lot of growth potential for each of our three brands, and through our focus on enhancing guest satisfaction and franchisee profitability, we believe that we will create value for all of our stakeholders for many years to come.” he added.
RBI said the company implemented new accounting standards to reflect the timing of franchise fee revenue, advertising fund contributions and expenses.
Total revenues for the quarter were $1,071.8 mill. compared with $1,000.6 mill. reported in the first quarter of 2017. Net income attributable to shareholders was $151 mill., or $0.60 per diluted share, compared with $50.2 mill. or $0.21 per diluted share, reported in the first quarter of 2017.
RBI reported total revenues of $1,253.8 mill. and net income attributable to shareholders of $147.8 mill., or $0.59 diluted earnings per share, under the new accounting standards.