Restaurant Brands' Shares Dip Following Q3 Revenue Miss and Slowed Burger King Sales Growth

Q3 profit comes in above expectation despite increased commodity, labor and energy costs; declining traffic and increased competition from rival McDonald's highlighted as challenges.

• Restaurant Brands missed Q3 revenue estimates as Burger King's slower sales growth pulled down overall results. Yet, the company reported a Q3 profit higher than expected, despite rising costs in commodities, labour, and energy.
• Last year, Restaurant Brands launched an investment of $400 million into a revival strategy for Burger King, titled 'Reclaim the Flame', focusing on advertising, digital expansion, and store renovations. In the latest quarter, about $12 million was spent on this project, reducing the chain's US footprint by closing under-performing units.
• The adverse effects of the war in Ukraine and Israel-Hamas conflict may continue to impact Restaurant Brands if they cannot adjust their prices adequately to balance increased costs without impacting consumer demand negatively.
• The Burger King branch saw same-store sales growth of 7.2%, lower than the expected 8.6%. Meanwhile, their primary competitor, McDonald's, eroded their market share by improving their menus, promotions, and pricing.
• While Burger King struggled to meet expectations, both Tim Hortons and Popeyes witnessed same-store sales growth. Tim Hortons met analysts' expectations with a 6.8% gain, and Popeyes exceeded expectations with a 7% rise.

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