Restaurant Brands International Inc. (QSR) reported an increase in sales and quarterly profit Friday as new plant-based product offerings helped drive traffic and bring in younger customers to Tim Hortons and Burger King.
RBI, which operates the Tim Hortons, Burger King and Popeyes restaurant chains, reported an adjusted net income of $331 million, or 71 cents per share, in the three month period ending June 30, compared with earnings of $313 million, or 66 cents per share at the same time last year. The company’s stock trading at $77.47 as of 11:58 a.m. ET, an increase of more than six per cent compared to Thursday’s close.
RBI has been getting in on the growing popularity of plant-based food options, rolling out an Impossible Foods vegan burger at Burger King location in the U.S. in April as well as Beyond Meat breakfast sandwiches at Tim Hortons locations across Canada in June. The company also announced last month that Tim Hortons will be offering two Beyond Meat burgers to its lunch and diner offerings.
“We’re seeing a really, really good response from our guests,” RBI chief executive officer Jose Cil told analysts on a conference call Friday morning following the release of second-quarter results. He also said the introduction of the plant-based products at both Tim Hortons and Burger King chains has led to existing guests coming more often and trying out the new offerings, as well as brought in additional traffic.
“We’re seeing new guests as well – younger guests – and we’re seeing a shift as well in demographics,” he said. “We feel really good about the potential that this platform has for Burger King, and we’re seeing the same thing with Tim Hortons in Canada... We’re really excited about it.”
Tims lagging behind Burger King, Popeyes
System-wide sales across RBI’s three restaurant chains jumped nearly eight per cent overall, with Burger King leading the way with 9.8 per cent growth in the quarter, followed by Popeyes which reported an 8.8 per cent jump. Tim Hortons reported more moderate sales growth of 1.6 per cent.
Tim Hortons also lagged behind Burger King and Popeyes when it came to comparable sales, a closely watched metric in the retail industry. The coffee chain reported a 0.5 per cent increase in comparable sales, compared to 3.6 per cent at Burger King and 3.0 per cent at Popeyes.
Tim Hortons has been busy rolling out a range of items to its menu over the last several months, including kids meals, chicken strips, new cold beverages and the plant-based sandwiches. While Cil said the Beyond Meat breakfast sandwiches and other menu innovations at Tim Hortons were “performing well and driving healthy levels of incrementality,” the coffee chain saw softness in lunch sales and cold beverages.
“We have a lot of work to do there to continue to grow, we have a strong lunch business that we think has ample room for growth, both in terms of the product side as well as in terms of the beverage side,” Cil said.