RESTAURANT Brands reported fourth-quarter sales above estimates on the back of strong performance at Burger King International, but high costs and muted spending in the United States took shares down nearly 6 percent on Thursday.
Fast-food chains are offering certain items at lower prices to attract consumers who were turning away from dining out due to high menu prices over the last two years.
Industry leader McDonald’s topped quarterly global comparable sales estimates as it also ramped up marketing to drive demand.
“2025 was a demanding year for restaurant operators. The consumer was under pressure, costs were elevated, and macro and geopolitical uncertainty weighed on confidence across many of our markets,” said Restaurant Brands’ executive chairman Patrick Doyle.
Expectations are for a similar consumer environment in 2026, executives said on a post-earnings call.
Same-store sales at Burger King US rose 2.6 percent for the quarter, but missed estimates of a 3.5-percent rise, according to data compiled by LSEG.
“We have seen stronger traffic patterns within middle and higher income cohorts, and its been a bit weak with lower income cohorts,” CEO Joshua Kobza told Reuters in an interview.
Prices of beef, one of the key ingredients for the fast-food chain, hit record highs in the US, resulting in about a 7-percent commodity inflation at Burger King US, the company said.
Higher costs were also delaying its remodeling targets at Burger King US, the company said.
Restaurant Brands’ supply chain costs were up 8.4 percent for the full year, as Tim Hortons also battled high coffee prices, partly due to tariffs.
“Looking ahead, some of the key questions are whether Burger King can keep building traffic without leaning too hard into discounting as the value competition heats up,” said Sky Canaves, analyst at Emarketer.
However, Burger King’s international segment saw comparable sales growth accelerate to 5.8 percent from 4.9 percent a year ago, helped by strong demand in Europe and Asia.
Same-store sales at Tim Hortons, which accounts for about 42 percent of the company’s operating profit, rose 2.9 percent and missed estimates of a 3.7-percent rise.
The company reported quarterly same-store sales growth of 3.1 percent, compared with estimates of a 2.73-percent rise, while adjusted profit of 96 cents per share beat estimates by 1 cent.
