Restaurant Brands International (QSR) Q2 2024 earnings summary

Executive summary

• System-wide sales grew 5% year-over-year, with global comparable sales up 1.9% and net restaurant growth of 4%, driven by strong Tim Hortons and International performance.

• Total Q2 2024 revenues reached $2.08 billion, up 17% year-over-year, supported by the Carrols acquisition and segment growth.

• Net income for Q2 2024 was $399 million, up from $351 million, reflecting a $79 million gain from the Carrols step acquisition and higher segment income.

• Strategic acquisitions of Carrols Restaurant Group and Popeyes China were completed, introducing a new Restaurant Holdings segment.

• Despite a softer consumer environment, the company outperformed key competitors in major markets and maintained cost discipline.

Financial highlights

• Adjusted Operating Income for Q2 2024 was $632 million, up 9.3% organically; Adjusted EBITDA reached $721 million, up 7.5% organically.

• Diluted EPS for Q2 2024 was $0.88, up from $0.77; Adjusted Diluted EPS was $0.86, up 3.1% organically.

• Free cash flow for the first half of 2024 was $413 million; Q2 free cash flow exceeded $290 million.

• Net leverage ratio was 5x, with net debt as of June 30, 2024 at $13.2 billion and available liquidity of $2.2 billion, including $950 million in cash.

• Dividend declared at $0.58 per share for Q3 2024, with $261 million returned to shareholders via dividends.

Outlook and guidance

• System-wide sales growth for 2024 expected in the 5.5%-6% range, with net restaurant growth of about 4%.

• Organic adjusted operating income growth of 8%+ anticipated for the full year, consistent with long-term targets.

• Segment G&A for 2024 projected at $640-$660 million, with equity-based compensation of $170-$180 million.

• CapEx, tenant inducements, and incentives expected to total around $300 million for 2024.

• Adjusted net interest expense forecasted at $565-$575 million for 2024.