Restaurant Brands International (QSR) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

May 3, 2022 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Restaurant Brands International First Quarter 2022 Earnings Conference Call. [Operator Instructions].

Please note this event is being recorded. I will now hand over to the conference host, Stephen Lichtner, RBI's Head of Investor Relations. Please go ahead.

Stephen Lichtner

Thank you, operator. Good morning, everyone, and welcome to Restaurant Brands International's earnings call for the first quarter ended March 31, 2022.

As a reminder, a live broadcast of this call may be accessed through the Investor Relations web page at investor.rbi.com, and a recording will be available for replay. Joining me on the call today are Restaurant Brands International's CEO José Cil, COO Josh Kobza, CFO Matt Dunnigan.

Today's earnings call contains forward-looking statements, which are subject to various risks set forth in the press release issued this morning and in our SEC filings. In addition, this earnings call includes non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included in the press release available on our website. Please note that growth metrics discussed during the prepared remarks including consolidated system wide sales growth, net restaurant growth and organic adjusted EBITDA growth exclude results from Firehouse Subs, which we acquired on December 15, 2021 to reflect comparable year-over-year growth figures.

And now I'll turn the call over to José.

José Cil

Good morning everyone and thank you for joining us on today's call to discuss our first quarter of 2022. We started the year off strong, with progress in key focus areas including Tim Hortons Canada and Burger King U.S. and continued momentum in our international business, while also seeing digital traction across all brands, with home market digital sales reaching their highest levels ever, as a percentage of system wide sales.

During the first quarter, we once again grew year-over-year comparable sales, driven by just over 10% comparable sales at Tim Hortons in Canada exceeding our own high single digit expectations that we shared in March and 20% comparable sales growth in our Burger King International business. We also made further progress chipping [ph] away at the gap to our competition in Burger King U.S. but have important work ahead of us and are focused on establishing a strong growth plan in collaboration with our franchisees.

Meanwhile, Firehouse Subs continued to drive comparable sales on top of its double-digit growth last year. We also continued to make progress in digital initiatives. We saw a sequential improvement in the contribution of digital sales to overall sales across all brands in their home markets, including Tim Hortons, Canada reaching over 36% of system wide sales. Our development results in the first quarter kicked off another exciting year. And we're still expecting to accelerate overall net restaurant growth despite our decision to cease restaurant development in Russia, and a recent surge in COVID cases across China. In fact, we opened a record number of restaurants during the first quarter, led by all of our brands internationally and by Popeyes in the U.S. We also announced another exciting new development partnership with Tim Hortons in India, a priority market for us in our long term international expansion plans.