Burger King's U.S. same-store sales grew 8.5% in the second quarter, compared with 0.8% at McDonald's over the same period. But Tim Hortons, the chain that generates around 40% of Restaurant Brands International's operating profit, is decelerating, and Popeyes keeps losing ground in the U.S.
Restaurant Brands International is four years into rebuilding Burger King, and the results are now showing up in the numbers. U.S. same-store sales at the burger chain rose 8.5% in the second quarter, compared with just 0.8% at McDonald's in the same period. That marks the second strong quarter in a row: Burger King's same-store sales rose nearly 6% in the first quarter.
Burger King outgrows the industry
Average unit volumes for the Whopper are up over 20% since the burger's relaunch hit menus in February. As a result, the chain is taking market share, outgrowing the quick-service burger industry by more than nine percentage points as its Reclaim the Flame initiative continues.
The playbook behind the turnaround was borrowed from Domino's Pizza, where Patrick Doyle led a major turnaround before joining Restaurant Brands International as executive chairman in 2022. The strategy puts operations, including food and franchisee economics, ahead of marketing and growth. The company has remodeled over 1,000 restaurants since 2018 and plans to keep updating more of them through 2028. With operations on firmer footing, management can now shift focus to driving traffic through marketing built around the elevated Whopper.
Tim Hortons and Popeyes drag on results
Yet Burger King's progress hasn't lifted the whole company. Tim Hortons posted same-store sales growth of only 0.1%, its fourth straight quarter of decelerating growth. That slowdown matters because Tim Hortons is the company's anchor, generating around 40% of Restaurant Brands International's operating profit.
Popeyes Louisiana Kitchen is faring worse. The fried chicken chain posted a 5.2% decline in U.S. same-store sales, making it RBI's weakest brand over the past year, though management expects Popeyes to return to growth in the second half of 2026.
International segment stays a bright spot
The international segment remains a bright spot, with same-store sales up 5.5%. Burger King's 19% profit share, combined with the international segment's roughly 29%, means half the business is expanding, and nearly 90% of the company is growing or stable.
Restaurant Brands International shares traded at $79.23, up 2.76%, giving the company a market cap of about $35 billion. The stock trades at around 18 times forward earnings and pays a dividend yielding 3.3% at the current share price.
Source: The Motley Fool
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