Tim Hortons parent Restaurant Brands sees sales slow amid 'difficult' economy
"When we focus on the things that are fully in our control and listen to guests and owners and execute well, then it almost doesn't matter if things are, from a macro standpoint, softening or getting stronger, because it's always on us to deliver," said Axel Schwan, president of Tims' Canadian and U.S. operations, in the same interview as Fulton. "The last quarter was a pretty good one considering the circumstances."
Tims spent much of the period pushing its flatbread pizzas, a product introduced earlier this year to entice people to spend at the chain later in the day. It now says 70% of its flatbread pizza sales come after 2 p.m. or on weekends and those that purchase the items spend on average 2.5 times more than other customers.
The other cornerstone of its promotions during the quarter was a deal allowing customers to buy a hot breakfast sandwich for $3 when they purchased a coffee.
RBI's other properties didn't fare as well.
Firehouse Subs, for example, was "unable to offset industry headwinds" and Popeyes was "missing some of the offers consumers were looking for," RBI's chief executive Joshua Kobza said on an earlier call with analysts.
"We know we need to provide better value which we can deliver through better price points and a better experience," he said.
To begin this work, he said the company had introduced three pieces of chicken for $5 in mid-September and followed it in early October with a $6 big box.
The deals had brought more restaurant traffic and sales improvements, but Kobza said "we know that Popeye's has to provide a better experience and that will come from more consistent operations."
He hopes to achieve that by making Popeyes kitchens easier to run and the overall stores easier to access, which he said could mean introducing new restaurant formats.
There was also work to be done overseas with Burger King China, which chief financial officer Sami Siddiqui labelled as "struggling."
On the same analyst call as Kobza, Siddiqui said RBI had recently sent termination notices to its master franchisee, with which it is now locked in a dispute.
Siddiqui was hopeful they could find "an amicable solution."
"We believe this is a short-term situation and we are committed to the long term success of the business in China," he said.
Fulton declined to say whether Burger King will pursue a master franchise agreement in China again once it untangles its current woes. Instead he called the market "incredibly important" but agreed with Siddiqui that "there's work to do."
RBI's third-quarter profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3%.
On an adjusted basis, Restaurant Brands earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.