On November 3, 2023, Restaurant Brands International Inc (QSR, Financial) released its financial results for the third quarter ended September 30, 2023. The company reported a 10.9% year-over-year increase in consolidated system-wide sales, up $1.1 billion year-over-year. Global comparable sales rose by 7.0%, driven by 8.1% at TH Canada, 7.6% at BK International, and 6.6% at BK US. However, net income stood at $364 million, down from $530 million in the prior year.
Financial Highlights
Restaurant Brands International Inc (QSR, Financial) reported a 9.3% organic increase in Adjusted EBITDA, which stood at $698 million. Diluted EPS was $0.79, down from $1.17 in the prior year. Adjusted Diluted EPS of $0.90 decreased 5.6% organically versus $0.96 in the prior year.
The company returned over $360 million of capital to shareholders in Q3 while investing for growth and reducing net leverage. As of September 30, 2023, total debt was $13.4 billion, net debt (total debt less cash and cash equivalents of $1.3 billion) was $12.1 billion, net income net leverage was 9.1x and Adjusted EBITDA net leverage was 4.8x.
Operational Highlights
Restaurant Brands International Inc (QSR, Financial) reported a 7.0% increase in consolidated comparable sales and a 4.2% growth in net restaurants versus the prior year. System-wide sales increased 10.9% year-over-year. The company's four operating segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK) and Firehouse Subs (FHS) all reported increases in system-wide sales.
CEO Commentary
I am proud of the strength we're seeing across our brands due to the efforts of our franchisees and our teams which helped drive another quarter of double-digit system-wide sales growth and home market franchisee profitability growth. These results reflect our focus on enhancing operations, delivering great guest and team member experiences, and providing great value with the best quality products in each of our brands' respective categories. I am confident that we are well positioned to enter 2024 with momentum."
Looking Ahead
Despite the positive results, the company noted that there were increases in commodity, labor, and energy costs partially due to the macroeconomic impact of both the war in Ukraine and COVID-19. This has resulted in increases in inflation, foreign exchange volatility and rising interest rates which may be exacerbated by the conflict in the Middle East and could have an adverse impact on the company's business and results of operations if they and their franchisees are not able to adjust prices sufficiently to offset the effect of cost increases without negatively impacting consumer demand.
Explore the complete 8-K earnings release (here) from Restaurant Brands International Inc for further details.
