RBI 1Q24 Revenues +9.3% & Operating Income +7.7%; Burger King U.S. Comps +3.9%; Tim Hortons Comps +6.9%; Popeyes U.S. Comps +6.2%; Firehouse Subs U.S. Comps Flat

May 15, 2024 | Insights, Restaurant Research

Burger King’s results reflect traction from investments in remodels, digital, & equipment. Tim Hortons seeks to improve its afternoon menu offerings, Popeyes is riding the success of its wing platform & Firehouse Subs is making a big push to have a 100% digital mix (currently at 40%) while providing franchisees with incentives to develop new stores.

Burger King

  • A substantial RBI investment in the BK system includes: $300MM Reclaim the Flame investment remodel co-investment with franchisees; $250MM Royal Reset (towards tech & equipment); $150MM towards marketing & digital; $1B to acquire Carrols; and $500MM to remodel Carrols stores.
  • BK’s 1Q24 U.S. comps increased +3.9% y/y (on flat traffic) driven by strong marketing around flame-grilled & Have It Your Way positioning. Both U.S. comps & traffic outperformed the industry during the quarter.
  • Results reflected strong value offerings, including: $5 Duos; $5 Your Way meals; and $2.99 Wraps.
  • +37% y/y digital sales growth in 1Q24 (17% mix) driven by mobile orders, Royal Perks loyalty program & kiosks.
  • 100 stores have been upgraded under its Royal Reset program with another 400 expected to be completed by the end of 2024.
  • The $300MM Reclaim the Flame investment will help remodel 1.1k stores, modernizing 85% to 90% of the system by 2028. Remodels are driving a high-teens sales lift.
  • Store-level franchisee profitability of $300k+/store is now in sight for the system.

Tim Hortons

  • 1Q24 comps increased +6.9% y/y, driven primarily by its morning breakfast business which grew +7.5% y/y.
  • The brand’s PM business benefits from its: loaded bowls; wraps; Anytime Snackers (pastry with filling); Savoury Pinwheels (bread pastry with toppings); and the launch of new Flatbread Pizzas.
  • 1Q24 cold beverage sales increased +12% y/y, helping drive afternoon sales.
  • Further, a rollout of high-speed convection ovens will improve efficiency around its lunch/dinner offerings.
  • Implementation of scan & pay QR codes have helped improve drive-thru times by +8% y/y.

Popeyes

  • 1Q24 comps increased +6.2% y/y, driven by the success of its chicken wing platform (boosted by a Super Bowl ad that significantly increased awareness).
  • Traffic drivers for the quarter included its Honey Lemon Pepper Wings as a digital exclusive (helped drive 27% digital sales mix) & its Big Box value deal.
  • The new president of Popeyes U.S. & Canada will lead the launch of its “we don’t make sense, we make chicken” positioning & chicken wing campaign.
  • Introduction of “Easy to Run” kitchens in California are driving order automation & efficiency improvements.

Firehouse Subs

  • Firehouse Subs 1Q24 comps were flat y/y.
  • 1Q24 digital sales mix exceeded 40% during the quarter with plans to achieve a 100% goal by 2025.
  • A strong multiyear development pipeline reflects attractive incentive programs & the chain’s strengthening digital capabilities.

Restaurant Brands Intl 1Q24 Financials

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