Restaurant Brands International Inc's quarterly revenue has missed analysts' expectations as its biggest chain, Tim Hortons, was hit by fierce competition from high-end coffee houses and breakfast chains.
The weakness at Tim Hortons also overshadowed strong results at Popeyes, the widely popular chicken sandwiches of which helped the chain record its best comparable sales growth since its acquisition by Restaurant Brands in 2017.
CEO Jose Cil said Tim Hortons faced a challenging quarter. "Our result at Tim Hortons were not where we want them to be," Cil told on a post-earnings call.
The company has been sprucing up its Tim Hortons' outlets and adding new coffee and lunch offerings, while rolling out breakfast sandwiches with Beyond Meat's plant-based sausages in select Canadian cities, but those efforts are yet to bear fruit.
Comparable sales fell 1.4% at the breakfast chain. Analysts were expecting growth of 0.93%, according to IBES data from Refinitiv.
"Tim Hortons will need more time to develop its coffee platforms to accommodate global tastes and preferences," said Pacific Management Consulting Group's John Gordon.
The company's US-listed shares have gained over 26% so far this year.
Burger King And Popeyes Sales
Sales at restaurants open for at least 13 months rose 4.8% at Burger King and 9.7% at Popeyes in the third quarter ended September 30, beating analysts' estimates of 3.98% and 4.72% growth, respectively.
Popeyes' fried chicken sandwich, launched in August, became an instant hit with consumers, forcing operators of McDonald's Corp to demand for a new menu addition.
However, the popularity of the sandwiches led to shortages at Popeyes and the chain has since been working to secure supplies and bring them back in November.
Overall, revenue rose 6% to $1.46 billion, but fell short of the average analyst estimate of $1.47 billion.
Excluding items, the company earned 72 cents, beating estimates by 1 cent.
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