Combining Tim Hortons and Burger King into one company didn’t have much of an impact on sales during the first quarter, according to financial results released Monday (April 27).
Revenue for the iconic fast-food chains’ parent company, Restaurant Brands International (TSX:QSR), reached US$932 million in Q1. That’s just US$400,000 more than the US$931.6 million Tim Hortons and Burger King would have earned had they already merged during the same period in 2014.
The donut chain was the main cause behind the sluggish revenue growth at Restaurant Brands.
Revenue from the Tim Hortons side of the business declined 1.2% to US$682.4 million, whereas revenue grew by 3.6% at Burger King to US$249.6 million.
With the loonie’s sharp decline since January, the parent company pointed to unfavourable exchange rates as the main reason behind the decline.
But Restaurant Brands managed to boost profit 35% in the first quarter to $US84 million, up from the US$62 million the two companies would have earned during the same period a year ago had they been merged.
Leading up to the December 2014 merger, analysts cautioned the combined company would likely engage in cost-cutting measures.
In January, 350 jobs at Tim Hortons were cut across Canada and its Oakville, Ont., headquarters.
But Restaurant Brands CEO Daniel Schwartz told investors on a conference call Monday the company was still eyeing significant growth in the U.S.
“We do think it makes more sense to move to more of a franchisee-led development model. We’re already in discussions with perspective partners in important markets where the brand does very well about accelerating the pace of Tim Hortons growth,” he said.
“We’re excited the prospects of accelerating the pace of Tim Hortons’ brand in the United States…but it’s all about having the right partnership structures with the right operators.”
Tim Hortons opened 53 new restaurants in Q1, while Burger King added an additional 15.
