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Restaurant Brands (QSR) Q3 Earnings Beat on Higher Revenues

Restaurant Brands International, Inc. QSR reported an earnings and revenue beat in the third quarter of 2017.

Earnings and Revenue Discussion

Adjusted earnings of 58 cents per share surpassed the Zacks Consensus Estimate of 49 cents by 18.4% and rose 34.9% year over year on higher revenues, partly offset by increased expenses.

Revenues of $ 1.21 billion increased 12.4% year over year primarily owing to the inclusion of Popeye’s Louisiana Kitchen’s results as well as higher system-wide sales at both the Tim Hortons and the Burger King segments. Revenues also beat the consensus mark of $1.19 billion by 16.8%.

Inside the Headline Numbers

Restaurant Brands operates through three segments – Tim Hortons, Burger King and Popeye’s Louisiana Kitchen.  

Tim Hortons

Tim Hortons reported revenues of $827 million, reflecting a rise of 4.7% over the prior-year quarter, primarily owing to system-wide sales growth.

System-wide sales increased 3% on the back of net restaurant growth. The rise however lagged 4.8% growth of the year-ago period but was higher than 2.6% posted last quarter.

Comps at this segment increased 0.3% in the quarter versus 2% growth in the prior-year quarter and 0.8% decline in the preceding quarter. Comps were primarily driven by 0.6% growth in Canada.

Burger King

Burger King’s revenues were up 9.7% from the prior-year quarter to $313.6 million, mainly on the back of system-wide sales growth.

System-wide sales rose 11.2%, higher than 7% growth recorded in the year-ago comparable period, and 10.6% increase recorded in the preceding quarter. System-wide sales growth was attributable to net restaurant growth of 6.6% and positive comps growth.

Comps at the Burger King division grew 3.6% in the quarter under review versus 1.7% growth in the prior-year quarter and 3.9% growth quarter. The upside was driven by U.S. comps growth of 4%.

Popeye’s Louisiana Kitchen

Total revenues in this segment amounted to million. System-wide sales rose 4.5% owing to net restaurant growth of 5.9%, partially offset by declining comps.

Notably, comps at this division declined 1.8%, comparing favorably with a 2.7% decline in the last quarter. The decline was caused by a 2.6% decrease in U.S. comps.

Zacks Rank & Peer Releases

Restaurant Brands currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

McDonald's Corp. MCD reported third-quarter adjusted earnings per share of $1.76, beating the Zacks Consensus Estimate of $1.75 by 0.6%. Earnings also increased 9% year over year.

Chipotle Mexican Grill, Inc.’s CMG third-quarter 2017 adjusted earnings of $1.33 per share lagged the Zacks Consensus Estimate of $1.56 by 14.7%. However, the figure increased significantly from the prior-year quarter earnings of 79 cents.

Domino's Pizza, Inc.’s DPZ third-quarter 2017 adjusted earnings of $1.27 per share outpaced the Zacks Consensus Estimate of $1.12 by 4.1%. Further, the bottom line surged 32.3% year over year on the back of higher revenues and lower share count.

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