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Restaurant Brands International 8-K Report, Financial Results (Feb 12, 2025)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 12, 2025
Period End
February 12, 2025
Security
QSR
In the record · 2016–202610-K1110-Q338-K143

QSR filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 143 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’17Oct ’17
  2. Material agreement8-K · Nov ’19Nov ’19
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Apr ’24Apr ’24

01—Abstract

Summary

Summary of the 8-K filed February 12, 2025. Cited figures are marked; the original filing is the authoritative source.

Restaurant Brands International Inc. furnished a press release and supplemental financial and operational information reporting results for the three and twelve months ended December 31, 2024.

Global system-wide sales were $11,279 milliona in the fourth quarter, up 5.6%, and $44,476 million for the full year, up 5.4%. Comparable sales rose 2.5% in the fourth quarter and 2.3% for the year. Total revenues were $2,296 million in the fourth quarter (versus $1,820 million a year earlier) and $8,406 million for 2024 (versus $7,022 million), and income from operations was $2,419 million for the year, up 17.9%.

The increases reflect the Carrols and PLK China acquisitions completed in May and June 2024, which established the Restaurant Holdings segment. Net income declined to $361 millionb in the fourth quarter from $726 million, and to $1,445 million for the year from $1,718 million. Diluted earnings per share were $0.79 for the quarter and $3.18 for the year.

Income tax expense was $139 millionc in the fourth quarter, compared with a benefit of $410 million in the prior-year quarter. On a non-GAAP basis, Adjusted Operating Income was $578 million in the fourth quarter and $2,402 million for 2024, with organic AOI growth of 13.7% and 9.0%, respectively. Adjusted diluted EPS was $0.81 for the quarter and $3.34 for the year.

Net leverage was 4.6x at year-end, compared with 4.8x a year earlier. Free cash flow was $1,302 milliond for 2024. The company returned approximately $1.0 billion to shareholders in 2024, and its board declared a $0.62 per share dividend for the first quarter of 2025, with a targeted total of $2.48 per share for 2025.

For 2025, the company guided to Segment G&A (excluding RH) of $650 million to $670 million, RH Segment G&A of approximately $100 million, Adjusted Interest Expense, net of $500 million to $520 million, and consolidated capital expenditures, tenant inducements and incentives of $400 million to $450 million. Burger King's multi-year Reclaim the Flame plan includes up to $700 million of investment through 2028, with $133 million funded toward the up to $550 million Royal Reset component as of December 31, 2024. The company reaffirmed its long-term algorithm for 2024 to 2028 of 3%+ comparable sales, 5%+ net restaurant growth, and 8%+ system-wide sales growth, noting that net restaurant growth expectations may be reassessed after the Burger King China master franchisee situation is resolved.

02—Key points

Key Highlights

  1. Global system-wide sales grew 5.6% in Q4 2024 to $11,279 million and 5.4% for the full year to $44,476 million; comparable sales rose 2.5% in Q4 and 2.3% for the year.
  2. Full-year income from operations rose 17.9% to $2,419 million, and Organic AOI grew 9.0% to $2,402 million of Adjusted Operating Income.
  3. GAAP net income fell to $361 million in Q4 from $726 million and to $1,445 million for 2024 from $1,718 million; diluted EPS was $0.79 in Q4 and $3.18 for the year.
  4. Adjusted diluted EPS was $0.81 in Q4 and $3.34 for 2024; Adjusted EBITDA was $688 million in Q4 and $2,784 million for the year.
  5. Net leverage improved to 4.6x at December 31, 2024, from 4.8x a year earlier; free cash flow was $1,302 million for 2024.
  6. The Board declared a $0.62 quarterly dividend per share and partnership exchangeable unit for Q1 2025, and targets $2.48 in total dividends for 2025.
  7. 2025 guidance includes Segment G&A (excluding RH) of $650 million to $670 million, Adjusted Interest Expense, net of $500 million to $520 million, and capex, tenant inducements and incentives of $400 million to $450 million.

03—Questions

Frequently Asked Questions

  1. Why did net income decline so sharply in the fourth quarter despite higher revenue?

    Q4 2024 net income was $361 million versus $726 million in Q4 2023. Total revenues rose to $2,296 million from $1,820 million, but income tax expense was $139 million in Q4 2024 compared with a $410 million benefit in the prior-year quarter. The filing also shows lower net income attributable to noncontrolling interests in the period, and Q4 2023 included a $367 million increase in net deferred tax assets, as noted in the reconciliation footnotes.

  2. What drove growth in the Restaurant Holdings segment?

    Restaurant Holdings (RH) was formed after the Carrols acquisition, completed May 16, 2024, and the PLK China acquisition, completed June 28, 2024. RH reported total revenues of $445 million in Q4 2024 and $1,116 million from the acquisition dates through December 31, 2024, with Adjusted Operating Income of $14 million for the quarter and $44 million for the period. The company plans to refranchise the vast majority of the Carrols Burger King restaurants and to find a new partner for PLK China.

  3. What is the outlook for Burger King's investment program and the 2025 capital plan?

    Burger King's Reclaim the Flame plan includes up to $700 million of investment through year-end 2028, comprising Fuel the Flame advertising and digital investments, which were completed in Q4 2024, and Royal Reset remodels, technology and building enhancements. As of December 31, 2024, $133 million had been funded toward the up to $550 million planned for Royal Reset. For 2025, consolidated capital expenditures, tenant inducements and incentives (including RH) are expected to be between $400 million and $450 million.

  4. Are there risks to the long-term growth targets?

    The company's long-term algorithm for 2024 to 2028 targets, on average, 3%+ comparable sales, 5%+ net restaurant growth, 8%+ system-wide sales growth, and Adjusted Operating Income growth at least as fast as system-wide sales growth. The filing states that net restaurant growth expectations may be reassessed following a resolution of the ongoing situation with the Burger King China master franchisee. The International segment also recorded higher net bad debt expense in 2024 compared with 2023, primarily related to the Burger King China business.

  5. How much did the company return to shareholders and what is the dividend outlook?

    The company reported that approximately $1.0 billion was returned to shareholders in 2024, and cash paid for common share dividends and partnership exchangeable unit distributions was $1,029 million in the cash flow statement. The Board declared a $0.62 per share dividend for Q1 2025, payable April 4, 2025 to holders of record on March 21, 2025, and the company is targeting total 2025 dividends of $2.48 per common share and partnership exchangeable unit.

04—Continue

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