USA | Financial analysts have missed the mark following quarterly earnings reported by RBI, which were far lower than most expected.
Restaurant Brands International, (RBI) have reported quarterly earnings and revenue lower than what analysts expected, as same-store sales growth for all four of its chains fell short of estimates.
"Our results demonstrate the resilience of our business and the dedication of our teams and franchisees. We remain focused on providing great value for guests, improving franchisee profitability, and investing in our brands for the long-term,” said RBI CEO Josh Kobza.
“We have been pleased to see an improvement in consolidated comparable sales in October and remain confident we will achieve our eight percent plus Adjusted Operating Income growth target for 2024 and beyond."
Consolidated comparable sales were 0.3 percent, and net restaurants grew by 3.8 percent compared to the prior year. System-wide sales increased 3.2 percent year-over-year. Income from Operations of USD $577 million versus USD $582 million in the prior year, and Adjusted Operating Income of USD $652 million increased 6.1 percent organically (excluding FX and RH) compared to the prior year.
Diluted EPS of USD $0.79 was consistent with the prior year, while Adjusted Diluted EPS of USD $0.93 increased 4.6 percent organically (excluding FX and RH) compared to the prior year.
Following the Carrols and PLK China Acquisitions, RBI established a new operating and reportable segment, Restaurant Holdings (RH), which included results from the Carrols Burger King restaurants and the PLK China restaurants. RBI reported results under six operating and reportable segments consisting of the following: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), Firehouse Subs (FHS), International (INTL) and RH.
RBI plans to maintain the franchisor dynamics in its TH, INTL, BK, PLK and FHS segments ("five franchisor segments") to report results consistent with how the business will be managed long-term given RBI's plans to franchise the vast majority of the Carrols Burger King restaurants and to find a new partner for PLK China in the future. RH results include Company restaurant sales and expenses, including expenses associated with royalties, rent, and advertising. These expenses are recognised, as applicable, as revenues in the respective franchisor segments (BK and INTL) and eliminated upon consolidation.
On April 30, 2024, Burger King announced its Royal Reset 2.0 programme and expects to invest an additional USD $300 million in remodels from 2025 through to 2028. With the initial Reclaim the Flame investment and plans to remodel 600 of the recently acquired Carrols restaurants, Burger King will be on a path to achieve its goal of 85 percent to 90 percent modern image by 2028.
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