Tim Hortons parent company's sales hurt by restaurant slump

financialpost.com:

Restaurant Brands International Inc.’s sales grew less than anticipated in the second quarter, the latest sign of consumer malaise hitting restaurants.

The company missed estimates for sales growth at restaurants open more than 13 months, as a stronger-than-foreseen showing forTim Hortons’ Canada business couldn’t offset unexpected weakness in the rest of the operation. System-wide sales, which also include newer restaurants, was also just short of expectations.

Consumers around the world are pulling back from dining out as they cope with elevated prices and less spending money. Chains have responded with a series of deals, including Burger King’s US$5 meal in the U.S., which it launched ahead of rival McDonald’s Corp. in a fight for market share.

Further evidence of diner cautiousness was seen at Papa John’s International Inc., which also posted North America same-store sales that fell short of expectations. Chief financial officer Ravi Thanawala called out a “highly promotional” backdrop among quick-service chains and a “more value-conscious consumer” in a statement.

Sales at Burger King in the U.S. were about flat compared with the prior year, despite ongoing efforts to remodel locations, ramp up advertising and reduce customer complaints. Still, the chain outpaced McDonald’s, whose American business declined just under one per cent in the second quarter.

Restaurant Brands’ earnings per share excluding some items were roughly in line with expectations, with chief executive Josh Kobza saying the company is focused on “cost discipline.”

The company reaffirmed its longer-term guidance calling for average growth of three per cent for comparable sales and five per cent for net restaurant growth from 2024 through 2028.

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