Restaurant Brands reports mixed results as Burger King's U.S. turnaround shows signs of success

Restaurant Brands International on Thursday reported mixed quarterly results as Popeyes' struggles offset Burger King's successful U.S. turnaround.

Shares of the company fell about 2% in morning trading.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $1.10 adjusted vs. $1.09 expected
• Revenue: $2.53 billion vs. $2.54 billion expected

Restaurant Brands reported third-quarter net income attributable to common shareholders of $542 million, or $1.54 per share, up from $315 million, or 96 cents per share, a year earlier.

Excluding certain noncash items, the company earned $1.10 per share.

Net revenue rose 3.1% to $2.53 billion.

Across all of its restaurants, the company reported same-store sales growth of 3.8%. Restaurant Brands has reported same-store sales growth above 3% for the past five quarters.

While the broader industry saw traffic soften in the third quarter as gas prices stayed high, Restaurant Brands said it has not seen any significant changes in consumer behavior.

"The environment, from what we see, has been relatively stable over the last couple of quarters and even into recent months," Restaurant Brands CEO Josh Kobza told CNBC.

Burger King was the top performer, with U.S. same-store sales growth of 8.4%. The burger chain's home market is in the middle of multiyear turnaround, with a focus on improving its food and restaurants.

"The plans we've put in place over the last several years are working, and we're going to keep executing against them," Restaurant Brands Chair Patrick Doyle said on the company's earnings conference call. "Burger King has delivered over four years of industry outperformance, and now we've seen three consecutive quarters of truly exceptional results."

After improving the quality of its Whopper earlier this year, Burger King turned its attention to its nuggets and sauces.

"Nuggets and sauces, frankly, we knew for a while that there was an opportunity," Kobza told CNBC. "We've heard it loud and clear from our guests."

Since Burger King relaunched its nuggets on Sept. 1, with 100% white meat chicken, sales have shot up more than 35%, Kobza said on the earnings call. More core menu items will get an upgrade next year.

Tim Hortons reported same-store sales growth of 1.8% in Canada, its home market. In July, the coffee chain launched a line of matcha drinks, bringing more customers to its locations during the sleepier afternoon hours.

Popeyes was once again the laggard of Restaurant Brands' portfolio. The fried chicken chain's U.S. same-store sales fell 2.2%.

In recent quarters, Popeyes has struggled as other chicken rivals have lured its customers away with discounts. Restaurant Brands is trying to stage a comeback with improved restaurant operations and a focus on its core menu.

Restaurant Brands previously forecast that Popeyes would return to same-store sales growth in the second half of 2026, but Kobza said on the earnings call that the company now believes it will take longer, although traffic is improving. The return of Popeyes' $6 Big Box promotion in September boosted sales less than expected, according to Kobza. Plus, the chain has scaled back its wings to refocus on its core menu items, hurting sales in the short term.

The company's international business saw same-store sales growth of 3.9%, fueled by its Burger King locations.