Tim Hortons quarterly sales hit $2 billion for first time, but franchisee profits not where they need to be, exec says

financialpost.com:

Tim Hortons’ global quarterly sales surpassed US$2 billion for the first time in its history, but the coffee chain’s parent company said its franchisees’ profits still aren’t good enough.

Restaurant Brands International Inc. (RBI), the Toronto-based fast-food holding company that also owns Burger King, Popeyes and Firehouse Subs, has fully bounced back from its pandemic slump, reporting a roughly 3.8 per cent increase in profit during its latest earnings update on Aug. 8. Despite the gains this year, the company has faced public gripes from a Tim Hortons franchisee group over sagging profits at the store level.

“While we’re making very good progress on store-level profitability, I want to be clear that we aren’t where we need to be,” RBI executive chairman Patrick Doyle told analysts on a conference call.

RBI booked adjusted profits of US$387 million, or 85 cents U.S. per share, in the second quarter, beating forecasts of 77 cents U.S. and outdoing the previous year’s results by 3.8 per cent. The restaurant group reported sales of roughly US$10.95 billion, up 12 per cent compared to the same period last year.

At Tim Hortons, global system-wide sales reached US$2.02 billion in the second quarter, up from US$1.8 billion last year — the best-ever quarterly sales for the coffee chain, RBI spokesperson Jane Almeida confirmed. Same-store sales, a retail metric that excludes results from recently opened or closed stores to provide a clearer picture of year-over-year performance, grew by 11.4 per cent at Tim Hortons globally, and by 12.5 per cent in Canada.

While we’re making very good progress on store-level profitability, I want to be clear that we aren’t where we need to be

RBC Capital Markets analyst Christopher Carril said