QSR stock is in the red today after Tim Hortons reported lackluster quarterly results, failing to impress investors in parent company Restaurant Brands International Inc (TSX:QSR) (NYSE:QSR).
Restaurant Brands, which also counts Burger King and Popeye’s among its portfolio of assets, reported fiscal third-quarter net income of $351 million USD, or 75 cents per share, up from $250 million USD, or 53 cents per share, a year earlier. While these figures matched Wall Street’s estimates following a strong quarter from Burger King and Popeye’s, revenue of $1.46 million USD narrowly missed the beat. Tim Hortons accounts for 60% of RBI’s total revenue, and so its underperformance had the greatest bearing on QSR stock.
While Burger King’s success was driven by the launch of its plant-based meat substitute product, the Impossible Whopper, Tim’s was forced to withdraw sales of its plant-based products in all provinces except British Columbia and Ontario. The Canadian coffee chain is blaming a slump in same-store sales on poor returns in the hot drinks, cold drink, and lunch sectors, with sales dropping to $1.77 billion USD, compared to $1.79 million USD in the same period last year. QSR stock is down 3.6% during Monday trading.
Speaking on the withdrawal of plant-based products from stores, RBI’s chief executive Jose Cil said, “We saw some initial trial and excitement around the product. But we launched it as a limited-time offer, and when that window ran, we decided it was best to take it off the menu and maybe consider other alternatives down the road.”
He added that the quarter saw Tim’s struggle with “softness” in lunch and cold beverage sales, a persistent issue for the chain, as well as a new issue of declining hot beverage sales. Despite the disappointing performance of its mainstay brand, QSR shares have still gained over 23% since the beginning of the year, as Burger King and Popeye’s strong performance prop the company up.
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