Restaurant Brands International Beats Earnings: Inside the Fast-Food Turnaround

本站添加: 2026-05-07

[00:00:00]More market details to come, but first, Bill [music] Amed owns it. Berkshire Hathaway owns it, and that's shares of Restaurant Brands International. One of the world's largest quicks service restaurant companies with nearly $45 billion in annual systemwide sales and over $26 billion in market cap. Trading under ticker QSR, great ticker restaurant Brands has over 32,000 restaurants in more than 120 countries and territories. And its four banners are ones you'll likely know. That's Tim Hortons, Burger King, Popeye's, and Firehouse Subs. Well, 2025, you may recall, was a mixed year for the dining out sector in general. And we saw lunch favorites like Sweet Green and Carver struggling, while others more in the fast food lane try to figure out quickly how to adjust menus for inflation squeezed consumers with a big focus on delivering enough protein bang for the buck. Well, 2026 has the markets waiting to see who's adjusted to these consumer changes the best. And today, restaurant brands showed some signs of winning, reporting better than expected earnings and revenue, fueled by a successful turnaround at Burger King US. Total revenue for the parent conglomerate for the quarter came in at $2.26 billion, a $200 million topline beat. But it was same store sales, the magic metric, that showed where the magic was really coming from. Up 3.2% for the quarter for the entire company. But more impressively, Burger King's same store sales growth for its own brand popped up at an even healthier 5.8%, its highest growth rate in nine quarters. Good news for the fast food OG, despite higher beef costs that will likely stay that way longer than investors had originally hoped for.

[00:01:50]Well, Burger King has been in the throws of making changes to continue in its battle with McDonald's. It's updated its signature Whopper Burger, the first revamp of that product, by the way, in 10 years. And it's been renovating its eeries to present a quote clean image.

[00:02:05]Its redesign stores are 60% smaller and feature natural wood, open ceilings, triple drive-throughs, external food lockers for pickup, and walk up windows.

[00:02:16]Almost enough to persuade me to set foot back inside a Burger King and go get one of those flaming Whoppers. But the remainder of restaurant brands' portfolio has struggled to keep pace.

[00:02:26]When you take a look at Tim Hortons, its same store sales growth came in at 1.6% well below estimates while the Popeye's fried chicken chain reported same store sales declines of 6 and a half% its biggest quarterly drop in years. So those legendary shareholders suffering a more than 6% drop in the company's stock today. So we're going to be watching closely their upcoming 13F filings.

[00:02:51]That's what they file with the SEC disclosing the percent share ownership they have in these kinds of companies to see if Persing Square and Berkshire shift their positions in response to the news. Coming up in a moment, a spin through the headlines that are moving the markets today, including earnings results from Disney, Uber, and CBS. But first, this episode is brought to you by Charles Schwab. Timing the market, fighting inflation, or balancing risk.

[00:03:17]No one says financial decisions are easy. In fact, they can be tricky and often the forest in your head can lead you sideways. Financial decoder and original podcast from Charles Schwab can help.

[00:03:28]>> Join host Mark Reapy, head of Schwab Center for Financial Research as he offers modern strategies to help combat the wait, what in your head like overconfidence, loss aversion, and recency bias that may cloud your investing decisions. Listen at schwab.com/financialloder or wherever you get your podcasts. Well, the markets are on an absolute tear today. So, let's take a spin through some of the companies that have been making headlines. Starting with Disney, one of our favorites. Shares in the Magic Kingdom's maker ticket dis over 7% today. That's after the company reported quarterly results that beat expectations. Operating income for Disney's theme park segment rose 5% from a year ago to over $2.6 $6 billion showing the strength of international because this is despite a 1% drop in attendance at domestic parks blamed on geopolitical tensions reducing the number of wouldbe international visitors to the United States. Disney streaming business was also a standout. The direct to consumer unit, which includes Disney Plus, reached a double-digit profit margin, and revenue for Disney Entertainment, which includes the company's movie studios and streaming service, climbed 10%. Now, the high price of sports rights continues to be a challenge for the company along with all broadcasters. Operating income at Disney's flagship sports operation, ESPN slid 5% in the quarter, and that's something Disney's new CEO Josh Dear is going to have to figure out. Recently, he said that Disney is not looking to spin out or sell ESPN. Disney stock price is still down around 12% this year. Meanwhile, shares in Uber, ticker UB, are up over 9% throughout the day despite the company missing first quarter revenue estimates. The revenue miss was due to a miss in the ride hailing business, which company reps attributed to geopolitical tensions, gas price volatility, and yes, weather disruptions.

[00:05:22]>> Good old weather disruptions for some of these numbers not going out where they wanted to be. Well, despite the revenue miss, the stock has been boyed by better than expected guidance, including confidence in Uber's delivery segment, which is the fastest growing part of the business. It recorded 34% revenue growth in the latest quarter, and the company CEO said, quote, "The consumer is spending. They're spending locally, and we don't see any signs of that weakening at this point." Well, the earnings highlights continue. Today, I actually shifted from coffee to Marcher to keep me going. Shares in CVS Health, ticker CVS, gained around 8% after blowing past earnings expectations across its business segments. The healthcare giant also raised its 2026 guidance with the CVS CFO attributing that increase to the tailwinds for its insurance arm Etna, whose operating income came in at up 52%.

[00:06:14]>> Also a win for CVS's multi-year restructuring efforts. The company has cut $2 billion in costs, closed underperforming stores, and reshuffled leadership over the past year. I do miss the CVS that was in my neighborhood. And I realized as you were talking in the first segment, Ann, it was replaced by a Burger King. That is true.

[00:06:31]>> And the burgers, I bet you, not behind those perspect plastic shelf protectors that you see in CVS. You got a more open flow in your Burger store, Burger King store experience, I bet, than you used to have in your neighborhood pharmacy.

[00:06:43]>> Exactly. You don't have to call an associate over to get a crown. Exactly.

[00:06:46]>> Uh well, over to one final earnings highlight. Shares in Compass, ticker COM, were up as much as 30% today as the nation's largest real estate broker reported a surprise profit in the latest quarter. Earlier this year, Compass finished its acquisition of Anywhere, whose portfolio includes brands like Corkran, Century 21, and Caldwell Banker.

[00:07:05]>> Compass said the company was quote maniacally focused, good turn of phrase there, on integrating anywhere and had already seen $250 million in net cost synergies. pretty quick to realize those happening just 82 days after closing on that deal. Looking ahead, Compass expects that the combination will allow the company to achieve durable profitability despite a flat housing market with upside if that housing market does recover. Well, even with today's boost though, shares of Compass still down about 12% for the year. Well, let's take a quick break and when we come back, Victoria's Secret stock prices up 50% over the past six months.

[00:07:43]We're going to take a look at why and why an activist investor is nevertheless agitating for a board seat. We break it down.

[00:07:55]Well, we do love a good corporate drama story. And so, we're turning now to the story of one that's playing out over at Lingerie OG Victoria's Secret. The retailer is in a full-on proxy fight with one of its biggest shareholders.

[00:08:09]But this is a little different from other activist investor stories that we've covered because the agitation isn't coming from a hedge fund. Instead, it's coming from a retail billionaire who's actually built businesses in the exact same category and who wants a seat on the board. We're going to get into the details of all that drama and what it means for next month's annual shareholder meeting, but John, start us off with some context about Victoria's Secret.

[00:08:33]>> That's right. Victoria Secret, ticker VSCO on the New York Stock Exchange, market cap of about $4 billion. And like so many of the retailers associated with the mall, Victoria Secret struggled and is in the middle of a turnaround. The company was spun off from Bath & Body Works in 2021. That's when it became publicly listed. And in September 2024, the company bought in a new CEO, Hillary Super. She previously was the CEO of Rihanna's lingerie brand, a direct competitor to Victoria's Secret, so it was seen as a bit of a score. And her solution was clear. Let's get back to selling bras. Calling them quote, "The emotional heartbeat of our business."

[00:09:10]And at the time, Wall Street was hopeful as well. The stock popped 15% on the announcement of her appointment.

[00:09:16]>> Well, this one's been a really interesting story because Victoria's Secret John has had a longstanding identity crisis. It's tried to move away from the sort of very sexy brand that it has try has been in the past. Right in the early 2000s, we have images of the iconic Victoria's Secret fashion show which featured supermodels in angel wings and lingerie and that was put on hiatus in 2019. I mean there are real concerns about ownership and sort of misbehavior in this business and also there's just a move away toward from the sort of very stereotypical um visions of women with certain body types and and a real concern that it wasn't inclusive or fully representative. We've also seen other brands come to the four that have been built on slightly more quote unquote authentic brand positioning. So, we've seen celebrity brands like Rihanna's Savage by Fenty and we've also seen Kim Kardashian Skiims starting to take market share. So, where we've actually seen Victoria's Secret win over time has been in a category extension. That's actually been in beauty. So, lotions and mists and that's actually started to become the best performing part of the Victoria Secret portfolio over the years. So again, moving away from lingerie into other categories and particularly ones that are more inclusive.

[00:10:30]>> And that was part of the uh conundrum because Hillary Super wants to bring it back to bras. And a year after she signed on uh and we're talking fall of last year, the share price settled back down. Investors started laying blame on Super and the board for the company's lack of growth.

[00:10:46]>> So with all this going on, enter stage left. Brett Blundy and this is his firm BBRC International which owns about 13% of Victoria's Secret. So this makes Blundy and BBRC the second largest shareholder just behind Black Rockck which is the biggest shareholder with around 15%. So here's the rub. This is why Brett Lundy is not your typical activist. He's an Australian billionaire. He's been a successful entrepreneur and he's made his money building in exactly the same sector, global fashion brands and specifically a banner called bras and things. You guessed it, a lingerie retailer slapbang in the same category the Victoria Secret competes in. Well, Blundy's been building his position in Victoria Secret since 2022. So that's the year after the spinout. and he's been pushing privately for changes since 2024 and increasingly been getting his concerns voiced much more publicly and out of the private arena. He's been criticizing the board as being overtenured, so sitting there for too long and as having a stale perspective. And he's also reportedly pushed for removing the longtime chair Donna James, who's been in that seat for over two decades. And so it's been years of private back and forth apparently.

[00:12:05]Now it's coming to a public head.

[00:12:07]Victoria Secret said it has engaged extensively with Blundy over the years promising compromises including adding a mutually agreed to director. Victoria Secret said unfortunately Mr. Blundy refused to meaningfully engage on a resolution that did not include his appointment to the board. That is the issue. In March, Super herself, the CEO, said, "We need the time and resources to focus on our strategic plan without a lot of outside distraction." She thinks that she and the board are doing a good job. And in the latest quarter, international sales for Victoria Secret were up 43% year-over-year, and the share price has been up 50% over the last 6 months. So, there has been some positive movement from this leadership.

[00:12:47]>> So, let's talk a bit more about Blundy's profile. He's put himself forward twice as a candidate to join the board. Both times he's been rejected with the company saying that his appointment would introduce quote serious reputational legal conflict of interest and governance risks. And I want to talk about this conflict of interest piece.

[00:13:06]This reminds me of one investor Sardil Viglari who repeatedly tried to join the board of Cracker Barrel. Do you remember this?

[00:13:13]>> Yes. Right.

[00:13:14]>> And Big Larry himself and his firm owned a bunch of restaurants. Right.

[00:13:18]>> So I'm having sort of flashbacks to that in a very similar dynamic. Big Larry had tried to get himself appointed to the board of Cracker Barrel and the push back was very similar to this situation which was you're on the board of a competitor on the board and you own a competing restaurant. We can't get you behind the curtain and on the board of a public company. So very similar situation um over here at Victoria Secret. Earlier this week, Victoria Secret said Blundy is seeking to withhold votes against two directors at the company's June 11th annual meeting.

[00:13:48]So Blundy really putting his foot down and saying if I can't get on that board, I'm certainly not going to back uh keeping in place two directors who are on the slate.

[00:13:57]>> So let's think that through. I would imagine that I would want someone on the board who has had great success. We talked about how Blendy has had great success building these companies. Would you not want someone like that on the board? I can understand the conflict of interest, but at that point, are you only sourcing board members who are outside of the the world in which you're you're operating? Well, I think there's a difference between trying to source somebody who comes from the industry and is actively engaged and potentially competing with you today versus someone who's been in the industry for a long time, but isn't in a seat right now that involves day-to-day coming at you. And it is sort of a hand-to-hand combat in the world of retail at the moment. If you think about a recent situation we talked about, and that was in a completely different space, it's technology. We saw that the chief product officer of Anthropic stepped down from the board of Figma and lo and behold later that week we saw Anthropic unveil a competitive product. So the conflict of interest piece at least to me is very real but it is about is this somebody who's currently in a position to be able to compete with you dayto-day. So, how is this different than an activist like Elliot Management, for example, who they uh recently got five new board members installed on Norwegian Cruise Lines, but they're not necessarily saying, "I want to be on the board," or that this person represents themselves on the board. They put one of their proxies on the board.

[00:15:14]>> Yeah. And I think it's also a little bit different because Elliot Management is not simultaneously owning and operating its own cruise line. Right. Right. So, that's back to that conflict of interest point. But yes, with the Elliot management for an activist, if [snorts] you think about it, the core strength and the superpower of an activist fund like Elliot is looking at the financials, spotting the opportunity to put money to work, but then finding the best domain experts and executives to go and affect change at that company. So, there's some self-awareness that there's a difference between being a money manager and being an operator. And so, what an Elliot management wants to do, again, they're managing a fund, right?

[00:15:48]They don't want to be in the business of running businesses. They want to go pick the best people for the job, at least in theory. So, a bit of a different model from actually putting themselves on a board and doing the doing themselves.

[00:15:58]>> All right. So, June 11th, it's the annual investor day. This might come to a vote, this referendum. Where what should we be thinking if if we're uh shareholders in Victoria's Secret because you've got this person who's successful and he wants to have a quicker turnaround perhaps or have his influence uh known, but the company has been doing well in a slow turnaround.

[00:16:19]Yeah, I think it's going to be difficult to imagine that shareholders in general are going to vote against this uh existing slate of directors to put a potential competitor on the board. Um, so we're going to have to wait and see.

[00:16:31]Also, typically you'd want to hear what management has to say that's got real concrete plans around it. So, we want to hear what is their outlook for 2026.

[00:16:39]What are they going to do specifically?

[00:16:41]It feels so Victoria Secret needs a good oldfashioned investor day to get a fully fleshed out story out there with lots of detail around what the operating plan is and then at least that will give them a little bit of breathing room relative to Blundy coming after them with such a plum. We're going to keep on watching this one. Lots of drama and actually you know this whole topic of conflicts between certain kinds of shareholders, founders and other seasons operators.

[00:17:05]We're seeing it play out with Lululemon right now. Chip Wilson, the founder and former CEO, very unhappy with the board and its selection of a Nike executive to take the CEO seat. So, I expect to see some drama for unfolding over there.

[00:17:18]Well, there it is. The closing bell.

[00:17:19]It's 4 p.m. on the East Coast. The markets wrapping up for the day and we don't have a ticker tape. So, instead, we'll throw it over to our human ticker, our producer John.

[00:17:26]>> More record finishes today with all the major indices ending up in the green with the S&P 500, a new record up 1 and a.5% for the day. The Dow finishing up over 600 points, up one and a quarter%.

[00:17:40]And the Nasdaq hitting another record high, up 2% for the day. That's it for today's Brew Markets Daily.