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.”
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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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