Restaurant Brands International Inc said on Thursday it will close hundreds more outlets this year as the owner of Burger King and Tim Hortons looks to shore up capital to weather a sales hit from the COVID-19 pandemic.
Sales at Burger King and Tim Hortons have been hammered in recent months due to coronavirus-led restrictions on indoor dining and a drop in demand for on-the-go breakfast and coffee, with the company reporting an over 25% fall in overall second-quarter revenue.
Canada-focused Tim Hortons has been especially hard hit due to the country’s slower pace of reopening, said Chief Executive Officer Jose Cil.
“Canada has generally followed a measured pace of reopening, which has helped effectively contain the virus, but has led to a slower pickup in activity and re-establishment of routines,” Cil told analysts.
Restaurant Brands expects to end 2020 with roughly the same number of outlets as last year – a little over 27,000 – as the company continues to open new restaurants as part of its annual plan. It had net restaurant growth of over 5% in each of the last three years.
Restaurant Brands’ shares fell 2% in morning trading.
Still, growth at Popeyes has been surging, with the company cashing-in on its massively popular fried chicken sandwiches to expand into markets such as China.
Comparable sales at Cajun-inspired chain rose nearly 25% in the second quarter and come at a time when McDonald’s Corp, Starbucks Corp and Dunkin Brands have all seen a drop.
On an adjusted basis, the company earned 33 cents per share in the second quarter ended June 30, beating Wall Street expectations of 31 cents, according to IBES data from Refinitiv.