Tim Hortons in Canada: Comparable sales up 7.5%; System-wide sales growth of 8.3%.
International Segment: Comparable sales increased by 4.2%; System-wide sales growth of 11.6%.
Burger King U.S.: Comparable sales grew 3.9%; System-wide sales growth of 2.4%.
Popeyes U.S.: Comparable sales growth of 6.2%; System-wide sales growth of 10.2%.
Firehouse Subs: Comparable U.S. sales relatively flat; System-wide sales increased by 3.3%.
Adjusted EPS: Decreased slightly by 0.9% year-over-year to $0.73 per share.
Future Guidance
Net Restaurant Growth: Mid-4% expected for 2024.
Segment G&A: Estimated between $665 million and $685 million for 2024, including equity-based compensation between $180 million and $190 million.
Capital Expenditures (CapEx): Around $300 million compared to $170 million in 2023.
Depreciation and Amortization: Expected to increase from around $41 million in Q1 towards mid to high $40 million range by Q4 of 2024.
Adjusted Effective Tax Rate: Approximately 17.5% for the quarter.
Dividend: $0.58 per common share and unit declared for Q2, targeting $2.32 per share for the full year 2024.
Net Leverage Ratio: 4.8x at the end of Q1; goal to reach mid-4x by the end of the year.
Trends, Market Conditions, Sentiment
Consumer Sensitivity: Observations indicate consumers becoming more sensitive to price, reflecting in moderating check growth.
Value Importance: Acknowledged significance of value proposition in driving traffic, without the intention to reinvent the concept but to enhance it through quality food, beverages, and improved operations.
Market Share: Positive market share growth in Tim Hortons Canada, Burger King U.S., Popeyes U.S., and several international markets.
Digital Sales: Significant contribution from digital channels, especially highlighted in the international segment and Popeyes U.S.
Franchisee Profitability and Operations: Continued improvement noted across franchises, contributing to overall performance.
Macro Pressures: Acknowledged macroeconomic pressures including the conflict in the Middle East and weather impacts, yet maintained top line resilience.
Development and Remodels: Significant investments in remodeling and development, indicative of commitment to modernizing customer experience.
Notable Quotes
Patrick Doyle: “The performance from Tims in Canada has just been stunning.”
Joshua Kobza: “We believe the brand is now fully funded to deliver against our long-term plans for Burger King.”
Joshua Kobza: “We’re seeing exciting momentum in the early days of our journey as a wings player.”
Sami Siddiqui: “Over the long term, we plan to maintain net leverage between 3 and 5x… depending on market conditions.”
Joshua Kobza: “It’s clear we have a tremendous opportunity in APAC over the long term.”
