Restaurant Brands Beats Earnings as Burger King’s US Sales Soar 8.5%, Popeyes Struggles Overall

Restaurant Brands International reported second-quarter earnings Thursday that topped Wall Street’s expectations, driven by a striking turnaround at Burger King in the United States, even as the company’s other chains, particularly Popeyes, continued to struggle with soft demand.

The parent company of Burger King, Tim Hortons, Popeyes and Firehouse Subs posted adjusted earnings of $1.07 per share, ahead of the $1.03 analysts had expected, according to a survey by LSEG. Net revenue rose 4.5% to $2.52 billion, in line with expectations. Net income attributable to shareholders came in at $507 million, or $1.45 per share, up sharply from $189 million, or 57 cents per share, in the same quarter a year earlier.

Burger King’s US Turnaround Takes Hold

The standout performer in Restaurant Brands’ results was Burger King’s U.S. business, where same-store sales climbed 8.5% during the quarter, extending a turnaround that has taken hold in the chain’s home market over recent quarters. Restaurant Brands Chief Executive Josh Kobza credited the improvement to disciplined execution, saying in a statement, “Burger King’s performance is a great example of what’s possible when you invest in the fundamentals and execute well – an approach we’re applying across all of our brands.”

Restaurant renovations, sharper marketing, and a renewed focus on core menu items including the Whopper have helped Burger King steal market share from competitors in recent quarters. Burger King U.S. President Tom Curtis told CNBC that the chain has benefited from consistent deal offerings, such as its $5 duos and $7 trios, a contrast to rivals that have frequently reshuffled their value menus. By comparison, McDonald’s reported U.S. same-store sales growth of just 0.8% in its own second quarter, a result executives at that company described as disappointing, prompting McDonald’s to name a new U.S. president to help accelerate sales.

Executives said there remains further room for improvement at Burger King. The chain has additional plans to refine its menu following an upgrade to the Whopper earlier this year, and not all of its U.S. restaurants have yet been remodeled. Curtis said restaurant renovations could accelerate further if beef prices decline.

Burger King’s momentum wasn’t confined to the U.S. International Burger King restaurants posted same-store sales growth of 5.5% during the quarter, according to the company, with Burger King’s overall adjusted operating income rising to $137 million from $121 million a year earlier.

Tim Hortons and Popeyes Lag Behind

Not every part of Restaurant Brands’ portfolio shared in Burger King’s momentum. Tim Hortons’ same-store sales in Canada, and overall, came in essentially flat for the quarter, rising just 0.1%. Kobza acknowledged the chain’s marketing had underperformed expectations during the period, telling investors on the company’s earnings call, “Taking a step back, while our marketing did not perform as anticipated in Q2, we were encouraged by stronger business performance as the quarter progressed and are excited about the back half calendar.” Tim Hortons revenue and operating income still increased during the quarter, driven largely by higher supply chain sales and consumer packaged goods performance, with adjusted operating income rising to $287 million from $278 million a year earlier.

Popeyes Louisiana Kitchen was the weakest performer across Restaurant Brands’ portfolio, with U.S. same-store sales declining 5.2% for the quarter. The fried chicken chain has struggled in recent quarters as an increasing number of competing restaurants chase a smaller pool of diners who have grown more value-conscious amid persistent cost-of-living pressures. Kobza expressed cautious optimism about the chain’s trajectory, saying, “While sales remained soft during the quarter, we’re encouraged by the improvement we saw and continue to execute against the same priorities,” and adding that he expects Popeyes’ same-store sales to return to growth in the second half of the year. Popeyes’ adjusted operating income fell to $63 million from $66 million a year earlier, as declining comparable sales weighed on both revenue and profitability for the segment.

A Bright Spot in Firehouse Subs

Beyond the company’s three larger chains, Firehouse Subs offered a relative bright spot, with system-wide sales growing 7.5% during the quarter. That growth was driven primarily by an 8.1% increase in restaurant count rather than same-store sales gains, which rose a more modest 0.7% in the U.S., suggesting the brand’s expansion strategy is currently outpacing organic demand growth at existing locations.

Solid Overall Growth Despite Divergent Brand Performance

Across the full portfolio, global comparable sales rose 3.8% during the quarter, ahead of the roughly 3% growth analysts had estimated, while consolidated system-wide sales climbed 6.4% year over year to $12.7 billion, including 10.7% growth internationally. Adjusted operating income rose to $715 million from $668 million a year earlier, representing 6.7% organic growth. Kobza framed the mixed results across individual brands as evidence of the strength of the company’s broader, diversified structure, saying the results highlight the benefits the company has built through disciplined execution across a varied consumer environment.

Shares Slip Despite the Beat

Despite topping Wall Street’s earnings and revenue expectations, shares of Restaurant Brands fell more than 1% in morning trading Thursday, and were reported down roughly 2% in post-earnings trading by some tracking services, as investors focused on the continued weakness at Tim Hortons and Popeyes rather than Burger King’s standout performance. The stock had entered the earnings report trading around $73.88, with a mean analyst price target of $85.04 implying roughly 15% potential upside, according to a survey of 27 analysts covering the stock, 17 of whom rate it a buy, nine a hold and one a sell.

Financial Position and Longer-Term Goals

Restaurant Brands’ net leverage improved to 4.1 times during the quarter, though the company still expects between $500 million and $520 million in adjusted net interest expense for 2026. The company continues working toward a long-term goal of consolidated net restaurant growth of at least 5%, with current growth running at 2.9%, unchanged from the prior year and still requiring acceleration to meet that target. Restaurant Brands also continues efforts to refranchise most of its company-operated Carrols Burger King restaurants, find a new partner for Popeyes’ China operations, and attract investors for its Firehouse Subs Brazil business, initiatives the company has said could affect segment profitability depending on their timing and execution.

With Burger King’s U.S. turnaround continuing to carry the company’s overall results, investors are likely to watch closely whether Tim Hortons can build on the stronger performance Kobza described emerging later in the quarter, and whether Popeyes can deliver the return to same-store sales growth executives have projected for the back half of 2026. The divergent trajectories across Restaurant Brands’ four chains are expected to remain the central storyline shaping the company’s performance heading into the remainder of the year.