Restaurant Brands International (QSR) Q2 2024 earnings summary

Executive summary

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

• Net income increased to $399 million from $351 million, reflecting a $79 million Carrols step acquisition gain and higher segment income.

• Tim Hortons and International segments contributed nearly 70% of adjusted operating income, with Burger King, Popeyes, and Firehouse in North America making up the rest.

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

Financial highlights

• Q2 2024 revenues increased by $305 million year-over-year, with $230 million from Carrols.

• Adjusted Operating Income for Q2 2024 was $632 million, up $55 million from Q2 2023 and 9.3% 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 exceeded $290 million for the quarter; H1 2024 free cash flow was $413 million.

• Returned $261 million to shareholders via dividends; Q3 dividend declared at $0.58 per share.

Outlook and guidance

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

• Organic adjusted operating income growth of 8%+ anticipated for 2024, consistent with long-term targets.

• Segment G&A for 2024 projected at $640-$660 million; CapEx and incentives around $300 million.

• Adjusted net interest expense for 2024 expected between $565-$575 million.

• Long-term guidance (2024–2028): 3%+ comparable sales, 5%+ net restaurant growth, 8%+ system-wide sales growth, and AOI growth at least as fast as system-wide sales growth.