Restaurant Brands International (QSR) 8 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the Restaurant Brands International, Second Quarter 2023 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded.

I would now like to turn the conference over to Kendall Peck, RBI's Head of Investor Relations. Please go ahead.

operator. you, Thank and for everyone, Restaurant International's Brands Good second welcome quarter Call the XXXX. ended Earnings morning, to June XX,

reminder, will be of broadcast for replay. on webpage a may available rbi.com/investor a at recording accessed Relations the this a and be Investor As call live

Joining the are call Restaurant Chairman, International's Executive Dunnigan. me Doyle; CFO, CEO, Matt on Patrick Josh today Brands Kobza; and

and forward-looking risks release contains call statements, our morning set issued in earnings subject various which Today's to filings. press forward the this in SEC are

In earnings this call addition, measures. includes non-GAAP financial

measures Reconciliations of included non-GAAP release press available our financial are in the website. on

During measures today, that call franchisee we profitability on based referencing unaudited self-reported franchisee portions of are results. will the be

consolidated and In net generate our profits comparable we addition, profits in not the adjusted gross organic franchise discussed to as did consolidated the new any not do including sales generate restaurant restaurants system-wide sales, XXXX. metrics results growth during in expect any growth remarks, EBITDA Russia and new exclude growth, Russia, in from XXXX, restaurants in prepared from the

the turn call to Josh. I'll now, And over

Good our to XXXX. second of joining and you on discuss today's quarter thank morning, us everyone, call for

system-wide driven X.X% solid helped growth teams franchisees year-over-year restaurant Our by XX%, and quarter growth. with of X.X% consolidated net comparable deliver and another sales sales

XX.X% at growth. including growth businesses, and top-line King, International strong saw We US. comparable in Burger EPS at and translated and our King sales Canada, adjusted Burger XX.X% This to Tim King organic XX.X% growth organic Tim EBITDA X.X% X.X% Burger at Hortons Hortons adjusted growth

X.X% grew was U.S. X.X% U.S. Popeyes up In for the quarter. Firehouse addition, and

for our year-over-year we each well to quarter year important brands. see moderation growth priorities, I plans to restaurant-level continued inflation, overall continue confident in one franchisee profitability. am this have and these We Improving of franchisee in helped of and the driving remains as profitability EBITDA deliver were in results, most of cost top-line our as another growth pleased place

it lower already to making our adjusted later EBITDA to results Those which own the little quarter, King in bit our delivering growth top-line were than and sales investments in franchisee due Burger growth relates are and profitability, detail the growth, this on. system. a U.S. we discussed largely will investments As expected system-wide previously provide it Matt was was more

their second also second We count very overall the and grew XXXX. are opened setting more net while Development the teams delivering year, always in quarter, place is the pipelines, XXX restaurant plans in restaurants half new our X.X%. full-year heavily weighted and for of on focused towards

Before I which turn report to I I'd pillars. you our brands XXXX made Restaurant the Brands Good communities achievements week, our also we the read about making are that to like more progress highlight our planet released across discusses encourage our for brand-level and in food, becoming results, people to sustainable. we last and

I make am the work we do teams adapting sure and While space know evolving we the also continually are quickly, I this our that are doing, very to is same. of proud

Cookie, and Tim with QX expansion system-wide into Hortons QX Canada. XX.X%. this of growth and healthy strength and improved a initiatives were sales which offerings, of service, sales traffic results driven turn mix in from our check, in year. core food, comparable performance starting and year into calendar XX.X%, to speed shifted saw let's drive record by continued of PM brand, cold of These We Now Smile by a strong beverage for

by mobility. aided improvements also were in quarter the for Results

XX% share sustained coffee During the quarter, our we brewed across core over in in categories, our leadership including XX% hot market over breakfast. and

across market cold was in progress today all brewed in XXXX, the beverages, than and opportunities leadership coffee hot our demonstrating growth it higher team's the in coffee categories. to addition In is

expansion to were player grow efforts by this its beverage The quarter in beverage year-over-year. results proved team and and our this as to high-growth XX.X% cold the the platform be of cold a to specialty beverage sales Quenchers bigger to progress quarter. category aided Sparkling Quenchers contributor is sales served Cold beverage cold good incremental a highly good with become and saw our ticket coffee offerings. innovation growth making across

restaurants. We which also innovations contributed loaded crispy These anytime to food our XX.X% attracted year-over-year growth to our to further and in PM new, barbecue PM improvements and food expanded offerings younger new including chicken, snackers bowl our our wraps, guests with around our sales. offerings

our food Moving execution. balancing the to with new have offerings strong beverage job operations, restaurant restaurant team done a and addition level great members of

service, Our year-over-year, helped teams seconds increase and offerings, of the just Faster north seconds improved our speed combined two drive of quarter. with QSR speed satisfaction new guest an share. of reaching increased service our in XX traffic for by

million of offers of believe brand. proud growth the monthly we have this really users digital continue We're food mix beverage Canada sustained roughly it drive and and guests its digital number the XX%. and X.X a app for the Tim experience average one Hortons to sales in quarter, With can have

It's with Canadians this are for two rewards, early, and engage is payment even but integrated partnered Card to providers To make still our way excited we it further service loyalty new with further fully launch Credit members. a that to engage and easier we earn within our drive Tim’s to app.

in being we ourselves Hortons, a Tim community-led At brand. pride

This more quarter, a Smile charities. our record-breaking local almost raised beloved than CADXX for XXX amount Cookie million of campaign

turns signature helping raised Tim Cookie, the volunteers old the Hortons charity Canada in the years. than years XXX,XXX Following more owners, of Tim an and month CADXX restaurant team children additional that year Camps, and July for over during million after members XX Horton’s Smile U.S. next Foundation our

communities. and local the their by team continue proud is restaurant recognize team really grow team made also sustainably results the in deliver work really incredible members, to possible support Axel of I doing I'm is the Canada. owners, to the our the the brand and of their

our Tim's in long to at brand a an and and for continued We've ahead. growth thank Canada like I'd their got restaurant and runway for amazing guests dedication. owners So support

the adding sales Burger King's $XXX sales now to million over business of in sales by strength restaurant to worldwide King, Burger of XX.X%, net system and These grew sales top as nearly second were well reflecting X.X% quarter. of Turning line the of XX.X%, incremental higher represent quarter traffic positive with international growth continued XX% by year-over-year comparable driven wide results as check.

Australia, the and like system We month as more saw Japan. were also We largest encouraged mark where well quickly, a of as Spain performance fourth France, in as growing a as U.K. Spain, market to surpass trailing good and XX sales our brand some to join the is France, markets on $X Germany such markets billion basis. international Australia wide see the the

digital menu everything, positioning to have Our teams These partners front better of and modern take an general, a improvements house. back the business, teams also the we innovation to in enhanced in a guest both centric In unlock guest restaurants deliver marketing. and to master help with franchise capabilities operational more experience. overseas even brand and capabilities newer enabling approach the from result, as

we as brand its Burger confidence Our King's to success market well. internationally gives leverage key enhance home positioning and learnings us as

system in the wide year-over-year U.S., comparable shifting X.X% now King sales to So and sales Burger grew X.X%. increased

we overall our enhance Our to X.X% carry as year-over-year commitment total the the of net declined health system. out restaurant

We to in franchisee continued front profitability. see meaningful are improvements making good have progress on and this

by flagship was the more marketing on driven and quarter Growth as benefits as Whopper, continued equity, aided enhanced calendar well effective thoughtful initiatives, marketing our operational improvements. focused by from analytics this

the core the one their campaign Our average of younger Duo, and have with can our Ways the discount Whopper without generation over XXX,XXX Whopper. tickets were reminded and the campaigns attracted Jr. this build Whopper Spider-Verse both it guests and guests impacting towards campaign of choose way targeted We core higher promotion, to Whopper between next lovers. initiative Whopper that of drove ways to These they the volumes. layered Whopper which building

territory. our During drive to in spent million Fuel million quarter positive in investments. These underlying our another are of QX still we with approximately we operations continued of enhancing on and digital not helped traffic, $XX investments advertising focus coupled improvement Flame although $XXX

will support another guest it for at believe still beginning in brand. we improvements but that growth only traffic, most are improving one we of to confident operations the operations, satisfaction of saw is the further I'm see in BKUS, here. the comes ultimately significant opportunities quarter near-term of we journey which When our

agree, guest before. as everything raise we brand path excellent experience. the and with continuous, that goal operations should towards a at has team center works standards did the better even our Tom the to I and the the to be better deliver than doing fully execute of This is are because franchisees is stressed, always BK you day

scores. satisfaction Trainings, Some Whopper encouraging are of through this results, including which Gold the Service ways driven higher product are we Standard have achieving

of success through is nuances a where may restaurant restaurant evaluated example lens a the to miss. the system, visit Another a of our visits the lens experience, customer's addition franchise formal of is capturing some guest

As technology the members for $XXX experience the we they to Royal part both million and refresh QX with million guests. in of towards need Reset a deployed restaurants $XX our $X to deliver program, component great equip million short-term team

full toasters quality committed with franchisees which roll essential program and we're dollar-for-dollar XX% The million pleased locked remodels the scrape prioritizing of will rebuilds. and Participating out projects the remodel have largely is franchisees kitchen matched to of or over broilers, underway, for in in also year. equipment half spend back $XXX investments like our in see and with

trajectory the plan another us and for this from important forward we our These confidence drive to give Reclaim strong to year. in represented of growth further to and continuing of franchisees system our driving early value goal traffic and our against step delivering the execute our talented QX franchisees. back a the team the dedicated towards proposition brand, results and Flame and look greater

to stages to improvements to which brand's core Easy is run in plan, through U.S., and menu operational kitchens. Sami to extensions, Love, the the Popeyes development now easy where multi-year of early team of life and are strategic coming Turning the

wide Top our resulting growth of line Ghost momentum beverage Pepper was chicken Popeyes in in platform, digital the comparable XX% of and and dessert sales categories by sales X.X%. in X.X%, U.S. and innovation X.X% growth extension sandwich our system net the across Wings, driven restaurants sales. grew

lighter, featured for This quarter Sandwich, well everyday unbreaded option a that return suited our Chicken delicious, is the the of occasion. Blackened

chicken also sandwich all now including our to bacon offerings, Blackened. are giving We cheese add of the to option and guests

back and Popeyes our members team core, Louisiana on dessert our and Ghost mango and offerings and U.S. Chicken the and marinate and Wings with strawberry hand built our to lemonade. our to bone love. beverage Pepper prepare, produce brought know of chicken we guests menu Outside At restaurants, biscuits bread,

and make leveraging the enable by more help in members execution. our for times reduce our of early markets of We team growing our are product learnings opportunities the kitchens to consistent to stages house to from run back easier prep international

While the tier and we to we I'm we're the our in are improve also on both more to path, pushing base, new restaurant capabilities opportunity positioning expanding. team operators. excited right brand are confident America top that across of North the forward existing existing the priorities place and Popeyes continue and we have capture with

team X.X% guests from Firehouse a our business major X.X%. but Finally, which for recovery grew are sales disappointed the included channels are several Firehouse of of This resulted and and and technology franchisees the sales on comparable party April X% Subs, X.X% sales our May. outage partner, and being affecting In sales highly by the by third increased vendor impact an our impact approximately focused our down main U.S., provider, system system-wide restaurant NCR. We throughout slow in comparable improving resilience members. and negative by

spend family passionate to their to ready time we nearly the Subs group potential course the the since development Moving and growth been forward, franchisees one by has growth higher in family into position RBI brand. priorities over of its clear franchisees this to realize have to capabilities. Firehouse Orlando. reunion It's in focus, July. XXX long-term path It adding to our outlining recent with of a for was at few the families Firehouse days our We exciting an top development leaned really brand franchisees enhancing for of the a of great that key me

a quarter, of rest more the During and the our mirrors brands. and transition led corporate the Canada, completed from model, team an and which the framework in franchisee area of structure to the U.S. traditional development Mike representative

opportunities. showcase offers with quarter This expansion our marked Zurich, global guest digital Firehouse development overseas the international love menu brand's with in the restaurant the XXX% first location ordering, a centric The great of opening future also reimagined restaurant know and serves a Firehouse of for design, the and start including as Switzerland. guests we

the surpassed established awarded foundations, million also Firehouse of Switzerland, team after since inception. modeled existing our Subs $XX Public has The safety grants Safety of Foundation which public

in and even all a are pleased bring development Lastly, to world. working Mexico agreement announce to hard more to iconic long-term we the countries were brand this recently around

With quarter. that, financial results Matt over for turn to discuss it I'll our to the

Josh and everyone. morning good Thanks,

year-over-year. For the sales grew second system-wide quarter, XX% our global

EBITDA up was the Our this Flame between and Fuel organically, grew X.X% adjusted to Burger $XX XX.X% our organically. million EBITDA our system-wide growth growth primarily due the difference adjusted was organic EPS The King U.S. and adjusted investments at sales quarter

In addition, adjusted as quarter, $X EBITDA bad in debt expense million $X recoveries QX, our lapping at by debt XXXX, impacted net this compared growth Popeyes. net the was bad million of primarily to of of

Burger of in volatility segment. quarter-to-quarter our which in debt, As million XXXX impacted including bad QX net expense a $X reminder, King primarily nearly of debt bad XXXX, saw

year-over-year. increase driving in turning in million driven U.S. up $X Now at the and this in compensation-related note was the by partially segment King G&A I the period. across segment quarter-over-quarter million cost which benefit business remain the year solid on nearly that this G&A, $XXX relatively and lapping at discipline approximately a $X was prior of million focused come X% to saw G&A flat quarter, quarter Burger we

compensation segment related ‘XX year. rate As will growth we largely expenses modest anticipate the technology on That far quarter. higher increase come prior to growth, moderate G&A seen our this said, XXXX expect and third significantly I've a in versus and the in mentioned segment have sequential through in this calls, we of year-over-year G&A so

of per Shifting earnings to representing was X% or $X.XX year, $X.XX headwind share EPS, about of $X.XX last organic increase share. second quarter compared year-over-year, X.X% adjusted our an to per an excluding FX

related Our was King headwind which from Burger U.S. share discrete investment, adjusted EPS Fuel per also items. $X.XX included benefit non-cash of by share to a tax to Flame our $X.XX offset per net

net adjusted and of net $XX also income million. Our interest million was expense higher of impacted adjusted compensation $XXX by equity-based

We expect equity-based continue $XXX million to million. compensation XXXX and to between be $XXX

during Turning to quarter cash free capital flow. generated cash the allocation, over and flow we of million $XXX

Fuel at by towards flow million impacted million this million cash Reclaim Our Flame was and the towards the about Reset. which $XX Royal of BKUS, included $XX quarter Flame investments $XX

In rates. addition, cash we saw interest a as result of increased higher interest market

is over the not over cash flow interest As FX next a locked I last positive at mentioned fixed our both our rates of quarter, million cash five in of although QX. in rate benefit years, XX% debt the free have hedges the and does benefit in reflect effectively $XX were of metric we place, which

to ratio ahead billion of approximately adjusted with billion, clear of We a the also target $XXX including liquidity XXXX which with our for with cash, full-year schedule. $X.XX $X.X and mid-Xx common we path through capital net available share We dividend, EBITDA per $X.XX of QX leverage $X.X and level the of reach share. X.Xx, at the a was unit, per ended of returned declared million shareholders our of quarter to target our

Patrick over thoughts additional hand business. for I'll the that, some it on to With

Thanks, and get amazing for RBI us all joining I've you exceptional amongst are to teams. leaders that franchisees now so It's for with our many Matt, nine been morning. thank doing been know months. things, to our and brand this

new I've how our you perspective investor enough I'm and in of as are shareholders, represent that the their giving what opportunities. part with been had being the the all the insight benefit A you outside I into I told to performing that my of York that still and direct starting of and little. February, we I businesses role to long Chairman events had to a see all New When of now Executive it is in know business. our as bringing big here interests starts

from in And Broadly, up operations teams. and I'd and brand well average moving the our just metrics column. our RBI wide the reflecting franchisees second marketing right more adjusted solidly organically, at system performed came sales in XX%, in brand brand are by franchisees improving our the quarter Same XX% even in were the win direction, the was growth than that. quarter. very was our good level businesses XX%, efforts put up under profits store of sales strength, EBITDA most the

still said, home lots growth not order will and But to slightly growth But improve, Burger Popeyes brand's order in store for also That growth our international Net King, solid, negative. our counts markets a businesses, Hortons aspire of as mix what restaurant opportunities. of have ticket profitability and were but very growth. both Firehouse that we to. continues flat to was nice all confident had we accelerate. with ticket Tim level I'm and

more the and but order brand. Comparisons across time is we Ultimately strength over second consistent the each need businesses. our half, will on of counts of get of in customers in measure the bringing growth best brands easier a

progress greatness And good finally, I store for be of a is clear requires return aren't for The to each we our very on to franchisees. while level be. we we're generate progress making profitability, brands the need but where we good, that great that want

have each very and I'd were to PM say businesses. focused Tim be understanding home I a for our of its beverage daypart, broadening to offering. If Canada, each Hortons, clear, We for how markets, our of brand's still down grow

U.S., For Burger and it's King operations modernization.

it's and store easy, And Popeyes, grow. For for grow, wrapped level each the constant Firehouse, on profitability. in word is brand each grow, clear, U.S., these, think internationally, development. for easy, easy, focus for And pretty I of

in even and Canadians opportunities. and rest with the Canada, about turn daypart first more reasons love the growing all it's world the Tim in me then Let our of food because both, dinner, Hortons platforms start us and originally improving PM giving to to what beyond great home At that markets platforms We've made afternoon lunch, take engage and brand. and of snacking with our new famous. progress beverage and the market us share made well that's

is convenience back our Tim's its this long-term Tim PM Canada, across for can't our ensure and for the underway well traffic how We and long also view, remains daypart, unparalleled how am we simply with of plan and with sales Axel a Canada's I overstate Canada runway morning I to about In growth Hortons growth. coupled amazing strong brand. have my most team's continue future win and the daypart, optimistic in traffic breakfast destination. in loved

work this in team King marketing. At is strong we is doing, the our have off, I and and $XXX to returns in the and and we is work operational results team deliver Burger have our think team fundamental both grow the there the franchisees by amazing done brand. operations and on meantime, paying Reclaim it's All the modernization. U.S., In will remodels, the more that about execution continue led We wins to digital-centric million Flame especially being investment put investments. as refresh to around Tom traffic working long-term consider the continue as to and already

At easy easy products food restaurants focused on the to our to access. our Domino's easy, our to we're and making easy U.S., crave, in run,

easy summer. our at new love our to we we remodel of and plan, this part As the to kitchen are earlier the convention committing unveiled franchisee kitchen redesigning

and this have with team already of to We feedback. locations handful and a working in are have gather franchisees closely that Sammy place

their will experience is Simplifying more our overall stay kitchen team with our likely a longer service faster, the off who offering load taking our kitchens to be simplified. brand as more means for and members, big guests accurate

Firehouse we to people it. just to have U.S., need way access At more

including of is me I believe subs heard in quality the ramp build the of team's with food starting absolutely see and Mike think a in mission lot in have do lot before quickly. a you'll best restaurants, franchisees XXXX. home and and it market Firehouse. beverages a that at QSR, straightforward, our up You've we say I

markets. the As teams on David in development Firehouse for best-in-class we opportunities, great growing and capabilities while brand look Tim's, existing leveraging development to to partners the partners. international are and further generating rest focus those markets, and with new our Burger accelerating King Popeyes of world to bring is the quality returns

beyond. growth are the get a set well-capitalized sales really our momentum have diverse in am unit and good. on franchise improvements plus of Between confident markets internationally, partners international driving we level markets master in average, net we're I our will we and in to the economics We restaurant X% seeing XXXX the and our are home and

track all call I earnings across important having their our committed performance success Each year-over-year areas, and basis our in of franchisee paybacks being to February. attractive on improvements with we'll most and in you ongoing for one on that deliver share brands to our of measure this profitability remain QX investments. these is

very partnership in resources what off moving more a about As I'm to see our to see the getting in investing It's entire a great time brand our the franchisees up and results. final in hard is giving comment, team's their encouraging experience. very paying business. pleased the generates business our and averages work magic more customers That and excited teams the

again your like support to joining everyone for and morning. us I'd for thank this

Now, I'll questions. take back operator your to hand the to it

first Our of [Operator TD question Instructions] line Cowen. comes Andrew Charles of from you. the Thank

open. line ahead. is Please Your go

you well Thank you franchisee Great. performed much. a profitability. in to the there. execute second Can the Flame? the curious, comment and to you potential Horton’s Reclaim accelerate for to investments know both turnaround investment this question on more see on need to sales for what Tim U.S. elaborate in the considering exceptionally continue I'm the you. Patrick, so your you

just can Thanks. on think know look those digital as a I point, what like. as at call comment we well it renovations, you a turnaround the this potentially

Yes.

thanks So Andrew, for the question.

and the in it's doing doing good the very these generating re-images, those re-images, that From lifts we're us franchisees, process of seeing in return early. we're getting but a results. sales, on for promising it's early So,

we've we definitely us. and then become And results consider franchisees convinced see, is to what more that's generating good the see for more what it. and need for to return it's certainly to that a we so we're got both And going fundamentally and

Andrew, a and Good as you the morning if well. thank question couple Maybe can Yes. add for of things there. Patrick, I

two remodels. small the as we us here we think so both I Flame the to and said goals the Patrick intentionally years through a that And think out over into bit and generate XXXX Reclaim both and think up year first set on goal prove the returns little accomplishing XXXX to plan far. want two. can compelling sample focus consistent I I in and that we're just It's the see I do at larger that those to But scale a size we're experience. or of now, next was

But our King of in longer pretty much buildings. to modern, other point think there Burger and I the term, all have of be concepts view is every and the new we with across the modern convenient country competitive need all that out

we it's years, do farther subsequent need go out to I So we really now. here the in of prove the returns kind important early think and

and if different maybe And can we I can think a a piece that. I the digitally enabled do there's I modern ways take think restaurants, on couple of that

test in five we're on bit time done We've might on seven seeing company ones years U.S. focused we've more here better a spending of seen say kiosks is recently pretty the much guest ago have in the a we're kiosks. our big to we reception to been than another One and restaurants,

this avenue the testing explore some further, to to and think be over and of of we rest are that's Tom So that the going an interesting team year. expanding

the by during fix it to of Popeyes. also to I that that. Russell me said pointed just $XX Domino’s sending script Venmo I'm out people by to instead point a need was I few out,

that. about Sorry

please, Thank question you. the next can Candice. You take

Thank you.

Our next from question Bittner Oppenheimer. comes Brian of

open. ahead. now Please is line Your go

Good Thanks. that Thank heard I I you. morning. Patrick. thought

You confirmed it.

Oops.

reach Patrick, level the you XXXX. X% plus growth that suggested unit could in

I anticipate to and given Matt, business accelerate just still Burger this relates Burger acceleration year? acceleration past XXXX XXXX, this see measurable size King do I implied as separately, just moving unit contribution XXXX growth. And to that versus to pretty unit anticipate do its to you'd has think to changed? important that's it drive or a What get its there, growth King the have in you and pretty in think RBI's a given to you comment

Yes.

So the thanks Brian, for question.

So, really things. are just there a few

picture you've that U.S., look at we've to U.S., a half already that you got push point King of as point First of that. the improvement if the in all, closures Burger to on you the in about talked and from improves a

bit we're X%. So already a over

range. eliminate says about five just in any Burger over you If you're time in King U.S. in math the in reduction stores now net The the

if then pretty you look all story I extraordinary this. within at of what is think And

from Popeyes, very XX% Firehouse growth on and You starts know, says on Hortons the restaurant rest the and the scale, X% in businesses doable. the of for in looking concepts, at world, Firehouse. U.S., rest the Hortons, Tim Those world the net very, got north incremental growth picture mean getting if you're XX% as you BK but rest hopefully they to you've on still – look X% U.S. continue plus are the in big the of some at in growth the that of world from for I other of it the just Tim XX%

XXXX restaurants. we higher Josh. just growth for Yes This than question. Yes, the piece Brian, I'll your XXXX do is expect take of other to still be

Thank you.

Thank you.

David of Evercore. Palmer comes of line from next Our the question

Your ahead. lines open. Please go are

they to you Analyst history back ancient where in company now, unit I there about getting XXXX Patrick, X% sales but X% growth and XXXX X% to next talked years. and high those are What as are mid areas feel wondering the about that to targets think of Thanks. all of to the few slate digit relevant? EBITDA upside, you look growth, Day mentioned Thanks. know X% where about, growth growth, system sales beyond, you growth. unit the it's seamstress about back X% was talked you full variables, and an how downside and key in targets I'm single as you

that's Josh, thing things Josh couple yeah, a actually say XXXX and is here was biggest look, think was in I I'd the when I'll that changed since it But said. inflation. to Well, kick

X% X% XX I year to world around we probably clearly the were overall result inflation a comps, think X% inflation levels has expecting over and said growth months. the we when ticket of last higher or as been

clearly has that were. changed So from we where

standpoint, very X% math I think and to as the it's work plus growth mean, store But from just certainly much you looks Brian, through I I said and a on very doable.

I of, think was that I think put out look target know, it XX,XXX restaurant looks over don't I very, four and the very certainly had we at it five a years course and doable. you or

of would said Yes into And and see the outlook what I is evolves we those to rest and reiterate get think some inflation how of little year over I year, Dave, end just this think what we Patrick forward. growth I have bit next need statistics the year. can a we going once of maybe like we more think look on to view what the this normalized

comes from the Dennis of Our question Geiger line of next UBS.

is go line Please open. Your ahead.

and congrats results. King traffic on strategic ability momentum the for about the Wondering bit more you, talk Burger a plans improvement U.S. that if to the and drive traffic to continue could Thank strong little going you forward.

you to key I in improvement Patrick, of the for being continued the as spoke support and both in kind a operations think Josh trends. improvement traffic

on other traffic to think So sort well more just Thank you. wondering critical those of improvement if operations continue as how trends. to that to as trajectory, drivers anything there strengthen

we have getting year. little negative. but bit store better, it remarks, it's it's remainder and prepared big It Burger question. Yes will area focus still of for slightly is Dennis, this the improvement King be us. for the sequentially I same but And of has in thanks so much so sure, mentioned into in a U.S. traffic, that a been for the traffic seen

think of time. goal next turn to for couple sure over positive to then that and flat our I is quarters the in

second we're structural our big quality I Fuel starting to in saw a as think of the we've improve investment. And that And of advertising, you Flame the focused one, that been on couple up to really that; to we're ramp quarter, both that. things the doing

that spent those of starting an it of to yet. some up been definitely We've spending, haven't of We so that element there. dollars much ramp some are important advertising

it's really every focused and and what the We're lot effort Tom restaurants back often. deliver focused Whopper. we extremely at a a on of every lot restaurants, more guests operations and see into of around brings the also have every training the Whopper, the incredible Spider-Verse time, on producing is day Whoppers And day, especially Jr., put how in you Whopper team

we trying deliver to and sure make So our back is excellent that we're guests. day brings every product the really

haven't those. this but investing the the more going We're you'll quality year. important next dollars really year should kind increasingly that and of of later think to become equation And much more yet, And seen you I you proper high the see of then this see remodels. into into part too remodels and an do

to those big are traffic anything some I around Yep. So factors turn to helpful Patrick, add equation. to the of think want you are there? us the that

Perfect. good. We're No.

line the of Stanley. from Harbour comes question Brian Morgan of next Our

Your line ahead. Please now open. is go

in Thanks. Maybe about Canada. I'll Good ask Hortons morning. Tim

where that just also we'll the talked supply we've has working mobility at more past You been the how of quantified the of normalized mobility inventory. some mostly I we're kind initiatives of kind start still much how this then you recovery profits? out certainly are Do higher at could And that supply point the think you about some of through but mostly past this on they chain kind separate and Are of past chain see working, in to you that point? cost there. driven? know

and one Yes same of Brian, of supply thanks part the there, on the the on the drivers kind for some and Matt take let take the sales, question. composition then I'll I'll chain. store

but the stable, out level normalized world to bit of What started a terms mobility little there I that In QX so of more QX to little think drove much I changing we're benefit, it's not there's a from see think a back quarter-to-quarter. what we lot. is performance, relatively to where so bit

bigger lot this the business. on quarter of the the think have are that we we're where saw of in a taking big what really initiatives drivers we I

was incremental things like beverage existing saw We've contributor. So things our Quenchers, to be big a of really the business. proved Sparkling version Quenchers, on platform. focused is been very to That like water just Quencher cold a sparkling you launched which very

summer We focused talked been well. And seeing the about version of business. this also launched lot of We've move was and our loaded the the wraps. with food barbecue on chicken really for and which those bowls PM a that quarter, very performed fitting initiatives those our things you're we've

bigger of in moving they're the we're some share dayparts, a in market becoming in mix and business. those So

a of give a stat about reference, little used to bit to cold be beverage XX%. Just one you

ago, years four of about it's mix. back go you now our If XX%

traction as of composition we So we're business get starting of in movements to see some the pretty categories. in big those the

do next Matt, slide? to want you take the

the Thanks Brian. for Hey, question.

cost I'd quite On therefore we and all as margin things we've had you higher prices, increasing to the to percentage. volatility supply chain, know, through work started I year both with sales, and think say a bit impacting of of sales into last year normalize. see and this commodity

sequentially expected. were what margins kind at flat been where with consistent trending we fairly we've quarter of levels and This

the which And stage, through Patrick dollar the business, talked about up result, a growth, business, for and our focus business. we very driving they this as the as profit underlying in And strategies on year-over-year through I and quarter about. Josh, you organically heard was think is well from think the volumes that doing X% which at gross overall is

Eric Our question KeyBanc. Gonzalez next from comes of the line from

now Please is open. line Your go ahead.

the business. the U.S. Hey on another this Maybe quarter. thanks. Burger Congrats on progress King one

As Flame, that part have celebrity of of seem maybe a those you're saw advertising to bit Hortons resources. what endorsements. measured taking more This at we and some to your deploying what than Fuel peers done it would is different with a approach Tim the investment,

that to the So Thanks. seen out that I about talk maybe accounting blasted a of versus you how bit multi-year brand reposition strategy hoping we've speak building was you a strategy and are elsewhere. plan to could the

Yes, to lot a really on you over And the Thanks couple focus to trying steady I is of be lessen stunts. that equities of for think and kind over plan do characterized time, and well We're the building of a the the progressively those build question. years. Eric. business core our

over of the your lot We're good sales left. a resonate we the left in will still lot dollars it the advertisements, a the cadence we've guests. same-store got We've on or in how moved be with on left evenly. half and And a have point, and in years, to focused think we'll of direction. The work they have I so not lot And how of somewhat year of right next the a exact a you're a to quality firepower results. spend. that to in the got it initial seeing couple that place give spend the but two We're is the year news period

the ahead. next Please line Our comes Chris question of Carril from The go line's of RBC open. Capital Group.

Thanks. Good morning.

the So particular? Can more for Yes, the term pacing the contributor growth was contributor half, in there Popeyes brand, the and for new overall maybe expand you consolidated longer the maybe term. Thanks. maybe up strongest to brand brand place following the when bit be global Popeyes development thinking unit the about just ‘XX and you Easy a the with the meaningful a more brand strategy to Love maybe in in could of how net on the longer a in in are first beyond. growth

Yes, Chris. excited Thanks and we the would say morning. results long and very outlook. about good I are both term Popeyes, Yes, the development

know, run clip do growing You easy kitchen, we continue while the look the really to improvements business, U.S. been the you and to if at at we've good I on we think so. are a making

strong there the concepts had one consistent are out we've and US. the and free drive-through pretty fastest in of We growth standing growing

you U.S. right and evolving we're XX% outside piece growth now in growth, what's you up it of now at think international quarter, the year-on-year know the is if of that to look I the

countries I get development ramp like France, growing Brazil, starting in the that pretty the It's that's in around India, pace to So traction. up we're of to the other say Spain, UK, over based. places of starting all and broad Canada. we're world lot really really a and We're many

markets to of in we're scale sales those starting really get good of seeing the Some are of and those results to terms restaurants.

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year-over-year If wide the quarter, of you XX.X the the world for look in we're XX.X% the for up growth year. second at rest sales Popeyes, previous system lapping

U.S. the pretty I is think of people good outside have that discovered Popeyes

look in think numbers. obviously guests and very our Yes, at I if all I all that a compelling to of we've think resonates that segment we and just the a with starting segments, some around Its at it’s a really segment, got over you're – in the chicken up concept big segment globally world. growing is Popeyes the see the show world

America. Senatore of come of Our Sara Bank next of question from line the

Your go line Please is open. ahead. now

thank Great, you.

actually quick Just about is Tim's. One two follow-ups.

wanted industry to maintained in know say I through leading kind grew mobility as of Tim's of I'm is you just that overall. You the using a think we the said decompose of understand, versus share. compete that of to market gains, and segments, share market you dayparts I kind with lot but the to business that. benefits trying

I And more little then for if just ask a bit Burger maybe detail. King U.S., could on

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the about we think understand back to Just the trying in half. Thanks. the to how recognition should drivers it with and compares that

growing say gaining food I our are On referenced the would Yes, like we than faster more share And kind ultimately terms hot of market good our market brewed I things what Sara. we morning are breakfast aggregate core category, coffee. of share. is legacy market I in and the think Tim's, maintaining in

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more Burger go dollars come. I advertising probably to We've we're left and have spend. U.S., and what going reiterate what of before to the we On terms would just to more in in that prepared King said back got I be

engaged are operations, Tom in on with who higher really our team that improvements think the and are working great together franchisees driving I making quality operations. increasingly

top on of six you've of over number layer We a but of four I feedback you see service some they and we're that's business. to guest going all seen of that And metrics the things better think speed and for really kind have that in been of are quarters. the into across business yet, are will to I getting next of quarters. to that all go going the think the don't our this capital like

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Our comes Bernstein. from next of question Daniel Gartulio [ph]

Your lines go are ahead. open, please

so Can in And please China? your brands In some competition intensified evolution are particular, give maybe the evolution, of color this how team's in the focus you us on if Thank some challenges past, they you different to had you. time? in in expansion what's the brands China? on reacting Thank some coffee you. of particular, can the also

Yes, the of thanks. address I'll brands each in turn.

the and bit then starting starting growth to the a BK I improvements see number of Now, a slowed grew China. years and at BK, we of through and for during rapid pace think pipelines for you COVID, at that. out if down at We're outlook come the I look really teams, to a we're in think we

engaged the think ramping the team increasingly of and there focused back pace up on growth. is I

And performance we're seeing improved sales as well.

picked sales the sales look the of up, King for sales for If I up the brands double-digit sort from QX comparable in so you and second We quarter, Tim's. think picking at into performance had the same QX, Burger both both is too.

has growth store some competitive point, experience very we're and last a there. presence focused our the entered. At few offer competitors market, We've To a years don't since your our that we of but is been product on providing huge it ramped story. differentiated rapidly a it Tim's, pretty over up

open new for, of we're restaurants our some incredibly again. first you back, excited And lastly, a signed Popeyes, months to master-franchise which see partnership we a will we're with really and excited few

that'll the months, in things wait We potential to world think of we the couple we the China. the our in next happen some see anywhere in It's to of expect that can't for Popeyes of reaction the one has most and business. having

of of line Brian comes next question from Mullan the Piper Our Sandler.

Your line ahead. is now open. Please go

Thank you.

program versus more on And whether Any if to of not about just top Tim's driver loyalty meaningful yet, to in and then, could this coming transaction evolving even the in tailwind to Canada, great. in follow-up the represents a program. country? that specific Is thoughts what how past? become the large very we've the you you Just you growth years, a see base be your the from the line seen would future the just talk believe a user starting maybe

Yes Brian, good morning and thanks.

think It's in on Rewards become We users. are of that folks we really the Tim’s been and in proud of loyalty think tremendous. XX customer sales. team it are really business his something has and I digital the our some And evolved million important has country Axel of a the really to the working of that active people, X.X I business and work million driving have whole part monthly have done. a important In

seen expanding I is what means. recently Rewards you've we've been think what Tim’s happen

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Our Joshua Stephens. next from Long of comes question

open. is go line Please Your ahead.

we're global ideas other brands in across question. still base. opportunity, International. to Great, Curious of being learnings you there of kind to bear or the across thank that's already where largely prepared the the portfolio, comments, terms able the in noted your cross-pollinate unit just that's is my in you something if leveraging at come particularly for In opportunity if from that taking Popeyes an

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Our of Bernstein of comes Barclays. question Jeffrey next line from the

go ahead. Your line is Please open. now

Great. very Thank much. you

home in franchisees, I Josh. any franchise question mean, both maybe or topic BK just in it Patrick like I markets. it's moving conversations the the and Tim sounds on the kind getting? largest of pushback direction wondering, the what's Hortons sentiment, right global to a you're of the still with profitability know, for Just you're thinking go, those maybe you're are franchisee more you. and but what franchise-level the direction, of now, is things that in as I greatest and from moving the the side said you has Patrick, think things? right improvement just of focus having more lots wondering, I'm of area conversations Thank

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it's but they evolution. are depending So on the answer where a exciting, answer market-by-market their really in is

of the Gregory Francfort comes from line Guggenheim next of Securities. Our question

open. ahead. now is line Your go Please

U.S. improvement My could that kind changed just the quality taste quality anything the in dig else by if then work frequency of have for the is, guys question kind talked anything Hey, the on on question. food, helpful. think awful into Thanks. all driven to maybe you being of down improve or other thanks would how kind and it's and I us help customer that that measure the ratio. perceptions has of guys have either you be the metrics much of little about done or just Can or complaints of frame Burger the side you customer focused King lot a the

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Our of Baird. next question comes from the David of Tarantino line

open. ahead. now is line Please Your go

the check obviously a like Hi, had the elevated other of second about it King for quarter average good Burger trends brands. in I a couple morning. and lot Burger U.S. questions of was for King

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Zamparo Our CIBC. John of next question comes from

please ahead. is open, line so Your go

Good of a you you how morning. And Tim’s, a Great, as or breakfast above you and could is thank you. primary traffic XXXX to you. in particular Canada. breakfast obviously at a It's brewed sense Thank much expand at PM commentary main XXXX, opportunity compared was the question on that My the on see of remaining like food is to the daypart. focus, at but get levels. I Tim’s focus looks nice just Tim’s. how traffic specifically to coffee, hoping increase to least

John. Yes,

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next Jim Research. of Our of Sanderson in Northcoast comes line question the

now is Please open. line Your go ahead.

question. the for thanks Hey,

on for up second Tim moderate of more inflation going to related comment And the and with pricing? just the as same place the on look Tim provide year, you you prior for menu pricing a in about to Hortons, following was can Thank us half Horton. broadly, how you. Just the quarter the into your what Canadian the philosophy of part of sense for starts at back Market sales

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no time, As call there over back Kobza closing to like remarks. at for I'd additional hand this waiting are the questions to Josh

to contributed I'd great the thanks teams work our Great. everybody Thank they’ve us day of like our to to Well, all the call. Wish you the for just a around forward very you our want to more all joining on speaking and to extend I much. world today. look thank quarter. QX for great

Ladies second quarter and this concludes for joining. XXXX Inc. you Brands International earnings call. gentlemen, Thank today's Restaurant

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