Burger King Rebound Powers Restaurant Brands Past Weak Links
Restaurant Brands International posted diluted EPS of $1.45 in the second quarter as Burger King's US comparable sales accelerated to 8.5%, masking stalls at Tim Hortons and Popeyes.
Restaurant Brands International (QSR), the owner of Burger King, Tim Hortons, Popeyes and Firehouse Subs, reported diluted earnings from continuing operations of $1.45 a share for the second quarter of 2026, up from $0.97 in the first quarter and $0.60 in the fourth quarter of 2025. GAAP net income attributable to common shareholders more than doubled from a year earlier to $507 million, from $189 million in the second quarter of 2025.
The quarter's defining story was Burger King's US business, where comparable sales jumped to 8.5%, up from 5.8% in the first quarter and just 2.6% in the fourth quarter of 2025, and far above the 1.3% to 1.5% pace the chain posted a year earlier. That acceleration lifted consolidated comparable sales across the company to 3.8%, from 3.2% in the first quarter and 3.1% in the fourth quarter, even as system-wide sales growth held roughly steady at 6.4%.
The strength was not uniform. Tim Hortons, which had strung together 20 consecutive quarters of positive comparable sales as of the first-quarter release, saw growth nearly stall at 0.1%, down from 3.4% a year ago. Popeyes fared worse: segment comparable sales fell 5.1%, with US comps down 5.2%, a deeper decline than the 0.9% drop posted a year earlier, and segment adjusted operating income slipped to $63 million from $66 million. Firehouse Subs was a bright spot within the smaller brands, turning positive at 0.4% after a 0.8% decline a year earlier, helped by net restaurant growth of 8.1%.
Internationally, comparable sales moderated slightly to 5.5% from 5.7% in the first quarter but remained well above the 4.2% pace a year earlier, and the segment's adjusted operating income rose 12.8% to $194 million from $172 million on constant-currency system-wide sales growth of 10.7%. The international segment also began recognizing royalty revenue again from Restaurant Brands China after the January 30, 2026 transaction that deconsolidated the business into a 17% equity-method joint venture, a shift from the discontinued-operations treatment used through 2025.
Organic adjusted operating income growth decelerated to 6.7% in the second quarter from 10.7% in the first quarter, a comparison against a stronger 15.6% print in the fourth quarter of 2025. Income from operations still grew 48.4% year over year, accelerating from 39.3% in the first quarter and reversing declines of 2.2% in the fourth quarter and 27.2% in the second quarter of 2025. The domestic Restaurant Holdings segment, which houses company-operated Burger King and Popeyes locations, posted adjusted operating income roughly flat at $17 million versus $16 million a year ago, as the benefit of Burger King's comparable-sales strength was offset by higher restaurant expenses tied to refranchising and start-up investment in Popeyes China and Firehouse Subs Brazil.
Restaurant Brands reiterated its full-year 2026 guidance unchanged from prior quarters: organic adjusted operating income growth of 8% or more, segment general and administrative expense excluding Restaurant Holdings of $600 million to $620 million, Restaurant Holdings adjusted operating income of $10 million to $20 million, adjusted interest expense of $500 million to $520 million, and total capital expenditures and cash inducements of about $400 million.
The company expanded share repurchases, buying back $137 million of stock in the second quarter, or 1,821,167 shares, building on a full-year target of $500 million disclosed in the first quarter. Combined with dividends, total capital returned to shareholders reached $435 million in the quarter, continuing the buyback program resumed in March 2026 after a pause, following roughly $1.1 billion returned in all of 2025. Net leverage edged down to 4.1x from 4.2x in each of the prior two quarters, extending a deleveraging trend from 4.6x to 4.7x a year earlier.