Tim Hortons, RBI’s biggest division, has been dealing with rising coffee prices as a result of consecutive seasons of adverse weather for arabica beans.Jeff McIntosh/The Canadian Press
The restaurant giant that owns Tim Hortons and Burger King posted second-quarter revenues that beat analyst expectations and surpassed last year’s results, but reported lower profit because of steeper expenses, including high prices for commodities such as coffee and beef.
Restaurant Brands International Inc. QSR-T garnered US$2.41-billion in revenue in its second quarter, beating analyst estimates of US$2.34-billion while topping last year’s second-quarter revenue of US$2.08-billion.
Net income attributable to shareholders dropped to US$189-million, or 57 cents a share, far below consensus analyst estimates of 94 US cents and down from US$280-million or 88 US cents a share in the same quarter last year.
Tim Hortons looks to switch to Canadian suppliers for U.S.-sourced items amid tariff threat
The company’s second-quarter operating costs and expenses rose about 36 per cent, compared with a 16-per-cent increase in 2024. Rising expenses ate into net income, including commodity, supply chain and advertising costs.
Tim Hortons, RBI’s biggest division, which accounts for about 45 per cent of its revenue, had been dealing with rising coffee prices as a result of consecutive seasons of adverse weather for arabica beans. Coffee accounts for about 15 per cent of its commodity food costs.
But RBI said relief is on the horizon with increased supply and lower prices.
“We’ve been encouraged to see some normalization in coffee prices following a period of historic highs,” RBI chief financial officer Sami Siddiqui said during an earnings call Wednesday morning.
Tim Hortons’ same-store sales increased by 3.4 per cent in the second quarter from last year’s sales. That’s shy of its 2024 same-store sales increase of 4.6 per cent over 2023.
Similar to high coffee prices, the price of beef, which makes up about one-quarter of the commodity food costs for Burger King in the U.S., increased at the beginning of 2025.
Mr. Siddiqui said beef prices increased in percentage terms in the “high-teens year-over-year, which we expect to translate into a mid-single-digit increase in the total commodity basket at Burger King U.S. for the full year ‘25.”
Beef prices in the U.S. are expected to rebound after years of herd downsizing pushed prices to record highs in 2025. Canada has also had a rise in beef prices because of fewer cows being raised in the country.
Burger King’s quarterly same-store sales were up 1.3 per cent in the second quarter, an improvement from 2024’s second quarter, when it reported a 0.1-per-cent drop in same-store sales from 2023.
Despite those commodity price increases, the company said it is still on track for 8-per-cent adjusted operating income growth in 2025 using existing operations.
Tim Hortons parent Restaurant Brands sees weaker spending as consumer confidence dips
The company said its advertising and promotional efforts helped boost revenue.
Tim Hortons’ new scrambled egg loaded boxes, advertised by actor Ryan Reynolds, helped drive more than 10-per-cent growth in breakfast food sales in the second quarter, chief executive officer Josh Kobza said.
Mr. Kobza also credited a promotional deal tied to the movie How to Train Your Dragon for boosting sales at Burger King.
Like other major fast-food chains, Restaurant Brands also found its value meals have boosted foot traffic as consumer spending in the U.S. drops amid concerns related to tariffs.
Burger King introduced value meals, starting at $5, and another RBI-owned restaurant, Popeyes Louisiana Kitchen Inc., launched $3.99 wraps.
Although total revenues grew, Popeyes’ same-store sales fell by 1.4 per cent in the second-quarter, compared with last year.
With a report from Reuters