Restaurant Brands misses estimates as Tim Hortons’ consumer confidence slips in Q1

Tim Hortons had relatively flat results in the quarter, reporting a 0.1 per cent decline in overall comparable sales. Photo by PEXELS

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It was a “slower start to the year” for Restaurant Brands International Inc. as earnings fell short in the first quarter of 2025 due to macro-economic pressures.

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Tim Hortons, whose performance usually outshines parent company RBI’s other brands, had relatively flat results in the quarter, reporting a 0.1 per cent decline in overall comparable sales, down from 6.9 per cent in the previous year.

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“We did see a little bit of a dip in consumer confidence, if you look at the Canadian consumer confidence index,” RBI chief executive Josh Kobza said during Thursday’s earnings call.

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The iconic Canadian brand accounts for more than 40 per cent of Restaurant Brands’ quarterly revenue. Its same store sales fell, missing analysts’ estimates of 1.40 per cent growth.

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Kobza said Tim Hortons’ dip in consumer confidence seems correlated with some overall market softness.

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“We definitely want to see (consumer confidence) go the other way,” he said.

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Kobza said Restaurant Brands has been navigating a highly dynamic macro environment through the first few months of the year, one that’s evolving differently across its key markets.

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The company, which also owns restaurant chains Burger King, Popeyes and Firehouse Subs, had anticipated that the first quarter would be its softest of the year, he said, adding that they believe some of the macro noise may have led to further softness.

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He told analysts that despite the slower start to the year, the company is seeing improved sales momentum in April. He said there have been early signs of Canadian consumer confidence coming back in the last couple of weeks.

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The Tim Hortons segment had total revenues of US$903 million in Q1, down from US$939 million year-over-year, a decrease the company said was primarily due to a $50 million unfavourable foreign exchange impact.

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Restaurant Brands reported a net income of US$223 million in the quarter ended March 31, down from US$328 million. Income from operations was US$435 million, down from US$544 million.

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This resulted in diluted earnings of $0.49 per share for the quarter, down from $0.72 in the previous year. On an adjusted basis, diluted earnings per share were $0.75, compared to $0.73 last year. This also missed the consensus estimate of $0.78.

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“We are making solid progress executing the fundamentals of our business, despite a slower start to the year,” Kobza said.

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System-wide, the parent company’s comparable sales sat at 0.1 per cent, down from 4.6 per cent in the same quarter in 2024. Total revenues for the first quarter were US$2.1 billion, up from US$1.74 last year.

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Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were US$642 million, compared to US$627 million for the same period in 2024.

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