Restaurant Brands International Inc. reported lower third-quarter profits compared with a year ago as sales dropped due to the pandemic.
The parent company of Tim Hortons, Burger King and Popeyes, which keeps its books in U.S. dollars, said Tuesday its net income amounted to US$223 million or 47 cents per diluted share, down from net income of US$351 million or 75 cents per diluted share a year earlier.
Revenue totalled US$1.34 billion for the quarter ended Sept. 30, down from US$1.46 billion in the same period a year ago.
The company said the year-over-year decrease in sales was primarily driven by a decline at Tim Hortons and Burger King and a decrease in supply chain sales, partially offset by an increase in sales at Popeyes.
RBI chief executive Jose Cil said while restaurants have made “steady progress” reopening, the company’s performance also reflected “certain more challenging impacts of the pandemic on consumer behaviour.”
“Routines remain on hold for a significant percentage of people as many offices, schools and other establishments remain closed,” he said during a conference call with analysts.
“Millions of people are still working from home, and the recent spike in cases in different parts of the world has caused some localities to reinstate certain restrictions, including the closure of dining rooms in some cases.”
As a result, Cil said the impact on consumption patterns has caused variability in the pace of recovery across regions.
But he said the company remains focused on the “long-term positioning” of its three major brands in a bid to return to growth.
Cil said RBI is proceeding as planned with the so-called portfolio optimization noted in the previous quarter, which will replace older underperforming restaurants with new locations.
“The stores we’re closing generate revenue 30 per cent lower than the average in their regions,” he said. “We expect the closures will have a relatively small near-term impact on our store count, and an even smaller impact on system-wide sales.”
On an adjusted basis, Restaurant Brands says it earned US$320 million or 68 cents per diluted share, down from an adjusted profit of US$337 million or 72 cents per diluted share in the same quarter last year.
Analysts on average had expected a profit of 63 cents per share for the quarter, according to financial data firm Refinitiv.
This report by The Canadian Press was first published Oct. 27, 2020
