Restaurant Brands shares fall despite earnings beat, strong international growth

Restaurant Brands International on Thursday reported quarterly earnings and revenue that topped expectations, fueled by strong international growth.

However, executives said that Burger King’s progress on remodeling U.S. restaurants slowed last year in response to higher costs, and the chain will no longer meet its 2028 deadline to modernize 85% of its domestic locations. The news disappointed investors, and shares of the company fell 6% in afternoon trading.

Here’s what the company reported for the period ended Dec. 31 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: 96 cents adjusted vs. 95 cents expected
• Revenue: $2.47 billion vs. $2.41 billion expected

Restaurant Brands reported fourth-quarter net income attributable to shareholders of $113 million, or 34 cents per share, down from $259 million, or 79 cents per share, a year earlier.

Excluding transaction costs, restructuring expenses and other items, the company reported adjusted earnings of 96 cents per share.

Net sales rose 7.4% to $2.47 billion. Stripping out currency fluctuations and sales from restaurants it plans to refranchise, Restaurant Brands’ organic revenue ticked up 6.5%.

The company’s same-store sales increased 3.1%, fueled by strong international growth.

Outside of the U.S. and Canada, Restaurant Brands’ same-store sales climbed 6.1%. International Burger King restaurants, which represents the bulk of the segment, saw same-store sales growth of 5.8%.

Analysts were projecting international same-store sales growth of just 3.7%, based on StreetAccount estimates.

And Restaurant Brands plans to keep growing its business abroad. In November, the company announced its plan to form a joint venture for Burger King China to accelerate expansion. Under the terms of the deal, which closed in late January, CPE, a Chinese alternative asset manager, owns roughly 83% of Burger King China. Restaurant Brands has retained a minority stake of about 17%, along with a seat on the board of directors.

Canadian coffee chain Tim Hortons reported same-store sales growth of 2.9%, although Wall Street was projecting an increase of 3.8%, according to StreetAccount. Tim Hortons accounted for 46% of Restaurant Brands’ overall revenue during the quarter.

Burger King reported overall same-store sales growth of 2.7%, topping StreetAccount estimates of 2.4%. The burger chain has leaned into promotions, like the SpongeBob SquarePants menu that launched in December, to fuel traffic growth from families.

“We didn’t need to rely on deep discounting to drive top-line results,” Restaurant Brands Executive Chairman Patrick Doyle said on the company’s conference call.

The chain offers $5 duo and $7 trio combo meals to reach budget-conscious diners, but it has kept its value offerings consistent, helping Burger King save on marketing dollars, Restaurant Brands CEO Josh Kobza told CNBC.

Burger King has also dealt with higher costs, particularly from rising beef prices. Executives said beef costs climbed 20% in 2025, putting pressure on profits for the chain and its franchisees.

Popeyes was the laggard of Restaurant Brands’ portfolio. Its same-store sales fell 4.8%, a steeper decline than the 2.4% decrease forecast by Wall Street.

But the company has plans to revive the embattled fried chicken chain. To bring back customers, Popeyes needs to focus on its operations and core menu items, like its famous chicken sandwich, Kobza said.

In November, Restaurant Brands tapped Burger King veteran Peter Perdue to lead the chain’s U.S. and Canadian business; last month, the company also named Popeyes veteran Matt Rubin as the chain’s latest chief marketing officer.

“We’ve been very upfront that sales are not where they should be, and you saw us make leadership changes in 2025 and earlier this year,” Doyle said. “As a result, I’m confident that the steps we’re taking, particularly the renewed focus on operations, consistency and brand standards, will translate into better performance over time.”

Restaurant Brands plans to share more of its ideas to grow the business at its investor day in Miami on Feb. 26.