Restaurant Brands International (QSR) Q1 2025 earnings summary

Executive summary

• Q1 2025 system-wide sales grew 2.8% year-over-year to $10.5 billion, with international sales up 8.6% and global comparable sales flat at 0.1% or over 1% adjusting for Leap Day.

• Total revenues for Q1 2025 were $2,109 million, up 21% year-over-year, driven by acquisitions of Carrols Restaurant Group and Popeyes China, partially offset by FX headwinds.

• Net income for Q1 2025 was $221 million, down from $328 million in Q1 2024, primarily due to higher operating expenses and increased tax rate.

• Management remains confident in delivering at least 8% organic AOI growth for 2025, supported by improved sales momentum in April and disciplined cost management.

• Major acquisitions led to the creation of a new Restaurant Holdings segment, with plans to refranchise most acquired units.

Financial highlights

• Adjusted Operating Income was $539 million, nearly flat year-over-year, as segment gains were offset by FX and higher expenses.

• Adjusted Diluted EPS rose to $0.75 from $0.73, a 3.3% increase; organic growth was 9.9% excluding certain impacts.

• Free cash flow for Q1 2025 was $54 million, down from $122 million in the prior year, impacted by higher tax payments and working capital seasonality.

• Cash and cash equivalents at quarter end were $899 million, with $1,248 million available under the revolving credit facility.

• Interest expense, net, decreased to $130 million from $148 million, reflecting lower rates and swap benefits.

Outlook and guidance

• Maintaining targets of 3%+ comparable sales and 8%+ organic AOI growth on average through 2028.

• Net restaurant growth for 2025 expected to be ±3%, slightly down from 2024, with a long-term target of 5% (1,800 net new restaurants/year) by the end of the guidance period.

• CapEx and cash inducements projected at $400–$450 million for 2025–2026, stepping down to $300 million post-2028.

• Segment G&A (excluding RH) expected at $600–$620 million for 2025; RH Segment G&A of ~$100 million.

• Sufficient liquidity expected to fund obligations, debt service, and capital spending over the next twelve months.