Restaurant Brands beats quarterly revenue estimates on Tim Hortons boost

By Juveria Tabassum

(Reuters) -Restaurant Brands International beat Wall Street estimates for second-quarter revenue on Thursday, as steady demand at its Tim Hortons coffee outlets helped counter sluggish sales at Burger King amid an overhaul.

Tim Hortons, like Yum Brands' Taco Bell, has bet on regular menu refreshes such as in cold beverages and quick bites to attract more customers.

The brand, which accounted for nearly half of the parent's revenue in the quarter, reported same-store sales growth of 4.6%, ahead of expectations for a 4.3% increase.

Revenue rose 17% to $2.08 billion, beating estimates of $2.02 billion, according to LSEG data. The company's U.S. and Canadian shares rose 2% in early trading.

Meanwhile, same-store sales slipped 0.1% at Burger King. Restaurant Brands rolled out a turnaround plan for the brand in 2022 that includes remodeling stores and upgrading equipment to improve customer experience.

Burger King revived its $5 value meal in early June, just ahead of a similar launch from rival McDonald's, to attract cash-strapped customers grappling with sticky inflation.

The company extended the offering to October and executives signaled good response from lower- and middle-income consumers for the value meal.

"Results look better when juxtaposed against category peers (such as Wendy's, McDonald's and Yum Brands), with quick service restaurants continuing to broadly underperform fast casual so far during Q2 earnings," said Morningstar analyst Sean Dunlop.

Still, Restaurant Brands warned of softer sales for the year as weak demand for dining out weighs on its efforts to revamp its Burger King chain.

"We clearly saw softer sales than expected across our businesses in Q2 and it's not yet clear when we'll see the category strengthen," Executive Chairman J Patrick Doyle said on a post-earnings call.

The company launched a reporting segment, Restaurant Holding, in the reported quarter following the acquisition of the chain's largest U.S. franchisee, Carrols Restaurant Group, as well as the Popeyes business in China.

(Reporting by Juveria Tabassum and Waylon Cunningham; Editing by Devika Syamnath and Sriraj Kalluvila)