Restaurant Brands International Inc. released its second quarter earnings Thursday, beating analysts’ expectations thanks to the strong performance of its Tim Hortons brand.

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RBI reported total revenues of US$2.08 billion in the quarter ended June 30, up from US$1.78 billion in the same quarter last year. The increase was driven by Tim Hortons, which reported just over US$1 billion in total revenue.

“Tim’s in Canada once again outperformed the industry and continues to showcase the power of delivering the fundamentals of quality, service and convenience to guests every day, and driving results for restaurant owners and for our business,” chief executive Joshua Kobza said during Thursday morning’s earnings call.

Kobza said Tim’s in Canada was well ahead of the broader industry, with a 4.9 per cent increase in comparable sales for the quarter.

He noted, however, that there has been some softening of consumer demand in Canada — a “little bit of nuance” he attributes to inflation and an uptick in unemployment.

“Probably the biggest difference is just Tim’s is doing a great job outperforming the market, even in a difficult market, and that’s been the case for a while now, and it’s certainly been the case in the year to date and in the second quarter in terms of value offerings,” Kobza said.

The increase in revenue comes despite weaker sales for the company overall and its individual brand segments.

The chief executive said the company was “certainly” planning for better absolute top line results.

Consolidated comparable sales were lower in the second quarter, with 1.9 per cent growth, down from 9.6 per cent last year.

This translated into system-wide sales growing five per cent in the second quarter, down from a 14 per cent in the prior year. System-wide sales totalled US$11.25 billion, compared to US$10.95 billion last year.

“While we still delivered solid global comparable sales growth this quarter, there’s no denying that the environment has been tough,” said Kobza.

Tim Hortons comparable sales were down 4.6 per cent from 11.8 per cent. Burger King had -0.1 per cent in comparable sales, down from 8.3 per cent in 2023. Popeyes Louisiana Kitchen was at 0.5 per cent from 4.4 per cent, while Firehouse Subs had -0.1 per cent from 3.4 per cent. RBI’s international segment comparable sales were down 2.6 per cent from 12 per cent.

Kobza noted how the company navigated a softer consumer environment that’s impacting the broader restaurant industry in a “busy” second quarter.

With softer sales, the company updated its full-year guidance, increasing its adjusted net interest expense to between $565 million and $575 million, from the previous range $555 million to $565 million. Segment general and administrative costs are now expected to be between $640 million and $660 million in 2024, from $665 million and $685 million, it said.

“We believe system-wide sales will be a bit lighter this year compared to our stated long term growth algorithm. That said, we’ve implemented expense improvements while continuing to invest in all the right areas to drive sustainable sales growth,” Kobza said. “As a result, I’m confident we’ll deliver organic adjusted operating income growth of eight per cent plus this year.”

On a consolidated basis, Restaurant Brands reported total adjusted operating income of US$632 million, up from US$577 million in the prior year. It said this year-over-year increase was primarily driven by increases in segment income at its five franchisor segments.

Tim Hortons had an adjusted operating income of US$269 million in the quarter, up from US$246 million in 2023 and representing about 43 per cent of the company’s overall adjusted operating income.

By comparison, RBI’s Burger King brand reported $114 million in adjusted operating income and US$364 million in total revenues. Popeyes reported an adjusted operating income of $62 million and US$194 million in total revenues.

In a note to clients, CIBC Capital Markets analyst Mark Petrie said consolidated revenues at Restaurant Brands beat expectations despite softer comps driven by increased company restaurant sales from its recently acquired Carrols Restaurant Group.

Adjusted operating income also beat street estimates, mainly on Tim Hortons’ strength.

The company reported an adjusted EBITDA of US$721 million in the second quarter, up from $665 million. Its diluted earnings per share were $0.88, up from $0.77 — slightly below the consensus estimate of $0.87.