Burger King’s $700 Million Fix Is Paying Off for Restaurant Brands International

Restaurant Brands International (QSR +2.81%) is four years into rebuilding Burger King, and the work is finally showing up in the numbers. U.S. same-store sales grew 8.5% in the second quarter, compared to just 0.8% at McDonald‘s in the same period.

That was the second strong quarter in a row for Burger King — same-store sales rose by nearly 6% in the first quarter. Average unit volumes for the Whopper are up over 20% since the burger’s relaunch hit menus in February.

The fast-food restaurant is taking market share, outgrowing the quick-service burger industry by more than nine percentage points as the company’s Reclaim the Flame initiative rolls on.

Image source: Getty Images.

Rebuilding from the kitchen out

The Burger King playbook was borrowed from Domino’s Pizza, where Patrick Doyle led a major turnaround before joining Restaurant Brands International as executive chairman in 2022.

The strategy puts operations, including the food and franchisee economics, ahead of marketing and growth.

The company has remodeled over 1,000 restaurants since 2018, and plans to continue updating more of them through 2028, building on a foundation of healthier unit economics.

With the business on firmer footing, management can now focus on driving traffic through marketing campaigns centered on the elevated Whopper.

The profit driver is decelerating

While Burger King’s results have been improving, Tim Hortons’ performance has weighed on the overall company’s results. The Canadian coffee-and-donut chain posted same-store sales growth of only 0.1%, marking its fourth straight quarter of decelerating growth.

The slowdown is a big deal because Tim Hortons is the company’s anchor, generating around 40% of Restaurant Brands International’s operating profit.

Meanwhile, its Popeyes Louisiana Kitchen chain continues to slide. The fried chicken chain posted a 5.2% decline in U.S. same-store sales. It has been RBI’s weakest brand over the past year, but management expects Popeyes to return to growth in the second half of 2026.

The international segment remains a bright spot for Restaurant Brands International, with same-store sales up 5.5%. Burger King’s 19% profit share, combined with the international side at roughly 29%, means half the business is expanding, and nearly 90% of the company is growing or stable.

Restaurant Brands International

Today’s Change

(2.81%) $2.17

Current Price

$79.27

Key Data Points

Market Cap

$35BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$77.97 – $80.73

52wk Range

$61.33 – $81.96

Volume

2.8M

Avg Vol

3M

Gross Margin

48.64%

Dividend Yield

3.29%

For someone who’s watched the Burger King saga unfold for more than a decade, it’s nice to see the turnaround taking place. Now, management needs to get old, reliable Tim Hortons moving in the right direction. With Restaurant Brands International trading at around 18 times forward earnings and paying a dividend that yields 3.3% at the current share price, patient investors may consider this a good time to pick up shares.