Restaurant Brands International, Inc. in the last quarter benefited from strong performance in its international businesses Tim Hortons Canada and Burger King, improvements at Burger King, Popeyes and Firehouse Subs in the United States, continued growth in digital sales and progress in the development of new restaurants.
Net income for the third quarter ended Sept. 30 was $530 million, or $1.17 per diluted share, compared with $329 million, or 70¢, in the prior year period. The increase was due to the benefit of income taxes in the current year compared to an income tax expense in the prior year, increases in segment income in the Tim Hortons and Popeyes segments, the inclusion of income from the Firehouse Subs segment, a favorable change in other operating expenses and the non-recovery of a loss due to early termination of the debt. These factors were offset by unfavorable currency movements, a decrease in Burger King segment revenue, an increase in stock-based compensation and non-cash incentive compensation expense, corporate restructuring and tax advisory fees, and higher interest expense. .
Total revenue advanced 16% to $1.7 billion from $1.5 billion.
“In the third quarter, we increased year-over-year consolidated comparable sales by 9%, driven by 11% comparable sales in Tim Hortons Canada, 15% comparable sales in our international Burger King business and sequential improvements at Burger King. King , Popeyes and local Firehouse Subs Markets,” said José E. Cil, chief executive, during a Nov. 3 call. fourth. “At Burger King US, we saw 4% like-for-like sales and continued to close the sales gap to peers. Our digital channels also continued to contribute to our sales growth this quarter, with global digital sales increasing year-over-year year with a 26% increase to almost $3.4 billion, capturing a third of consolidated systemwide sales.
“We also made strong development progress in the third quarter with Popeyes once again a standout and well positioned for another strong year. Looking ahead, we are confident in our long-term pipeline and expect our development mix to strengthen, Tim Hortons and bringing Popeyes to more and more markets around the world, while taking Burger King to higher levels.
During the quarter, Burger King in the United States increased comparable sales with its value platform, the launch of a crispy chicken sandwich, strategic pricing initiatives and a positive contribution from digital channels, Cil said.
Price increases and menu innovation helped Tim Hortons achieve comparable sales growth of 10% over the prior year. Popeyes’ performance was boosted by expansion of restaurants in North America and various global markets.
“Since 2017, we have added more than 650 net new units to our existing footprint in the local market while leveraging our development expertise and master franchise model to bring nearly 400 new restaurants to international markets,” Cil said of Popeyes. “In the meantime, the team is also preparing to bring Popeyes to major QSR chicken markets such as Indonesia, South Korea and France in the coming months. Our development momentum resulted in 9% net restaurant growth and, along with 3% comparable sales, including 1% of comparable sales in the US, led to system-wide sales growth in the 12% for the third quarter.
Firehouse Subs, which will acquire Restaurant Brands in 2021, posted relatively stable comparable sales while posting strong comparable sales a year earlier, Cil said.
“The brand continued to generate about a third of its sales through digital channels this quarter, helped by successful initiatives such as Rewards Week, which included seven days of exclusive offers and points for our Firehouse Rewards members,” he said. “This was just one of several creative initiatives during the quarter to increase digital engagement while delivering high-quality, delicious products that our customers know and love.”
In September, Restaurant Brands unveiled a plan to improve the performance of Burger King restaurants in the United States, committing to a corporate investment of $400 million over the next two years to support advertising, renovations, technology and digital improvements.