Restaurant Brands International Inc. (NYSE:QSR) Q4 2022 Earnings Call Transcript

Matthew Dunnigan: Yes. Just to maybe add 1 other quick one to everything Josh said there, Brian. I think the other one that’s critical for us is the focus on operations. And so related to what Josh mentioned about the improvement in guest satisfaction, we see that pretty clearly linked to all the efforts Tom and the team have been making across the system to improve the guest experience, improve operations at the restaurant level. And we know that our top operators in BK and our other brands as well drive much stronger profitability as a result of those efforts and actually grew profitability year-over-year despite the macro headwinds.

Patrick Doyle: I think guest satisfaction was up something like 20% from Q3 to Q4. So I mean we are moving in the right direction.

Operator: Our next question comes from Sara Senatore from Bank of America.

Sara Senatore:

Patrick Doyle: Sara, we’re not quite getting you.

Sara Senatore: Is this better?

Patrick Doyle: There you go.

Sara Senatore: Sorry. Okay. Sorry about that. Just a quick question on the outlook for G&A and also on Tim’s. So I think I just wanted to clarify on G&A that the expectation is that growth will be slower than it was in 2022. I don’t know if you have any more color you can give? And then on Tim’s in Canada, I think Matt mentioned that the margin was compressed. Just could you talk about how you think about pricing in Canada? Presumably, the franchisees are under similar pressures you talked about with inflation. I think in the U.S., we’ve seen pricing be relatively elevated across the industry. Is — are you looking at it the same way in Canada or is the idea you take share by keeping pricing relatively low versus inflation?

Matthew Dunnigan: Sara, thanks for the question. It’s Matt here. Just on the first part of your question related to G&A. Yes, I think the message was, and as Patrick described earlier, we’ve invested a lot over the past couple of years. We’ve built some really amazing teams, world-class teams here across the company. And we think we have all the assets that we need to really drive forward the initiatives that are most important to the business and growing from here. So we do expect the rate of growth in our G&A to moderate significantly in 2023 versus the rate that you saw in 2021-’22. And then I’ll pass it over to Josh for the second part of the question.

Joshua Kobza: Yes, good morning, Sara, and thank you for the question. I’ll touch on Tim’s pricing. I would just say that I think and the rest of the team, they are very thoughtful and very mindful of pricing that we take. We know that it’s core to kind of our purpose and our proposition to our customers to provide great taste and great value every day. And so we want to make sure that we’re upholding that promise for all of our guests, and we’re pretty thoughtful about that. But of course, we have seen cost pressures, and I’d say we keep an eye — a careful eye on what’s happening with inflation in the broader market, what’s happening in grocery and restaurants, what’s happening with our competitors, and we try to put all of those things together to get the right balance of pricing and value in our business over time.

Operator: Our next question comes from Gregory Francfort from Guggenheim.

Gregory Francfort: My question is just around development. And I mean there’s been a lot of talk about interest rates and capital availability potentially impacting franchisee appetite. Can you talk about this maybe from a U.S. perspective, but also from an international perspective where leverage might be lower? And then as you look out to the pipeline for store development this year, do you think you have a chance of accelerating overall store growth despite those headwinds?