Restaurant Brands revenue disappoints Wall Street as Burger King same-store sales miss estimates

Restaurant Brands International on Friday reported weaker-than-expected quarterly revenue, hurt by Burger King’s disappointing same-store sales growth.

Shares of the company fell less than 1% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: 90 cents adjusted vs. 86 cents expected
• Revenue: $1.84 billion vs. $1.87 billion expected

Restaurant Brands reported third-quarter net income attributable to shareholders of $252 million, or 79 cents per share, down from $360 million, or $1.17 per share, a year earlier.

Excluding items, the restaurant company earned 90 cents per share.

Net sales rose 6.4% to $1.84 billion. Restaurant Brands said that unfavorable currency exchange rates hurt Tim Hortons, which accounts for roughly 60% of the company’s revenue.

The company reported same-store sales growth of 7% for the quarter.

Burger King’s same-store sales grew 7.2%, falling short of StreetAccount estimates of 8.6%. The burger chain’s international same-store sales increased 7.6%, while the metric rose 6.6% in the U.S.

Burger King has been trying to rejuvenate its U.S. business for more than a year through its $400 million “Reclaim the Flame” plan. That strategy came after the chain lagged its rivals domestically for several years. As part of the turnaround plan, Burger King has leaned into the Whopper, renovated its restaurants and chipped its own money into the advertising fund typically fueled by franchisees.

Tim Hortons’ same-store sales growth of 6.8% met Wall Street’s expectations. In Canada, the coffee chain’s same-store sales climbed 8.1% in the quarter.

Popeyes was Restaurant Brands’ only chain to outperform expectations for same-store sales growth. The fried chicken chain reported the metric grew 7%, including a 5.6% increase in the U.S. That beat StreetAccount estimates of 5% growth.

Popeyes recently overtook KFC as the number-two chicken chain in the U.S.