International Restaurant Brand Corporation experiences a decrease in its annual earnings profit
Vibin' Breakdown:
Fast food giant Restaurant Brands International (RBI) faced a stumble in profits during Q1 2025, due to a chilly economic climate and lagging consumer confidence, as per CEO Josh Kobza. In an analyst call, Kobza shared that the company, which operates big-time brands like Tim Hortons, Burger King, Popeyes, and Firehouse Subs, had anticipated a rocky first quarter and believed that specific economic headwinds may have exacerbated the slowdown.
Kobza acknowledged that the business environment had been tumultuous in the early half of 2025, fluctuating across key markets. Despite some concerns, the company managed to steer clear of issues related to the Canada-U.S. trade war, with the Chief Financial Officer, Sami Siddiqui, assuring analysts that the majority of their supplies are local, and for the rest, alternatives are being sought in collaboration with suppliers and franchisees.
According to Siddiqui, any potential impact on the cost of sold meals would be around 100 basis points or less, should their efforts prove successful. While consumer confidence took a nosedive, Kobza revealed a silver lining, stating that they observed a rebound in April.
RBI reported a net income attributable to ordinary shareholders of $159 million US, or $0.49 US per share, for the quarter ending March 31. This figure is a significant drop from the $230 million US, or $0.72 US per share, reported in the same quarter last year. On an adjusted basis, RBI reported earnings of $0.75 US per share, up from an adjusted earnings of $0.73 US per share a year ago. Their revenue soared to $2.11 billion US, up from $1.74 billion US in Q1 2024.
Interestingly, Tim Hortons' same-store sales dropped by 0.1% during the quarter, a figure that would have been 1.2% higher if not for the Leap Day impact. Same-store sales plummeted by 1.3% at Burger King and 4% at Popeyes. Despite a rough start, Kobza expressed optimism, stating that the underlying strategy was on track.
"Although our results were dampened this quarter by less favorable comparisons, the impact of the leap day, and macroeconomic pressures, it's evident that the underlying plan is working," he said, adding that they expect an adjusted operating income growth of at least 8% in 2025.
In the turbulent business climate of 2025, Restaurant Brands International (RBI) and its French franchisee, Tim Hortons, experienced a challenge in maintaining profitability, as revealed by CEO Josh Kobza. To navigate this difficult financial terrain, the company is collaborating with suppliers and franchisees, seeking alternatives for non-local supplies.
