Restaurant Brands International Inc. (RBI), the parent company of Tim Hortons, has announced plans for significant investments in the Canadian market this year, focusing on accelerating the pace of store remodels and new openings. CEO Josh Kobza revealed during the company's first-quarter earnings call that RBI is planning more than 300 remodels and will inject 'hundreds of millions of dollars of investments' back into local markets.
Expansion and Growth
Kobza emphasized the company's commitment to expanding Tim Hortons' footprint, stating, 'We're going to be opening up restaurants and bringing Tims to new markets and new communities. We're making huge investments that I think almost nobody else is making or can make in Canada.' The company reported 4,569 Tim Hortons locations at the end of the quarter, up from 4,523 a year earlier.
Financial Performance
RBI reported a net income attributable to common shareholders of US$338 million for the three months ending March 31, a significant increase from US$159 million in the same period last year. Diluted earnings per share rose to US$0.97 from US$0.49. Revenue for the quarter increased from US$2.11 billion to US$2.26 billion.
System-wide sales for Tim Hortons grew by 2.4%, with the chain representing 41% of RBI's operating profit. Kobza noted that Tim Hortons has achieved 20 consecutive quarters of positive same-store sales, which were up 1.6% year over year.
Sales Drivers
Kobza attributed Tim Hortons' 'broad-based' growth to strength in both morning and late-night sales, particularly driven by cold beverages and breakfast foods. Despite what he described as 'macro softness' in Canada's economy, including higher gas prices and a harsh winter in the Toronto market, the chain has maintained strong performance.
'Our job, I think, is to deliver throughout any ups and downs that you see in the short run, and I think those things tend to even out over the medium term,' Kobza said.
Other Brands and Challenges
RBI's overall same-store sales increased by 3.2%, driven by strong showings from Burger King and the company's international business. Kobza highlighted robust performances in China, Japan, South Korea, and Australia. Burger King led the four fast-food brands in comparable sales growth, with a 5.8% increase during the quarter. RBI continues to execute a four-year plan to revitalize the burger chain through renovations, menu updates, and digital improvements.
Chief financial officer Sami Siddiqui noted that the company has faced 'unprecedented' pressure from high beef prices over the past year. 'We are closely monitoring beef costs and expect normalization over time, with relief now anticipated closer to 2027,' he said.
Siddiqui also confirmed that RBI is on track to open approximately 1,800 net new restaurants per year by 2028, including between 300 and 400 in Canada and the United States.
