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Restaurant Brands (QSR) Q2 Earnings: What's in Store?
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Restaurant Brands International Inc. (QSR - Free Report) is set to report second-quarter 2016 results on Aug 4, before the market opens. Last quarter, this quick service restaurant company posted a positive earnings surprise of 50.00%.
In fact, the company has delivered average positive earnings surprise of 17.63% in the trailing four quarters.
Headquartered in Miami, FL, Restaurant Brands came into existence with the merger of Tim Hortons Inc. and Burger King Worldwide Inc. It is now the parent company of these two iconic quick service restaurant brands. These independently operated brands have been serving customers for more than 50 years.
Let’s see how things are shaping up for this announcement.
Factors to Consider
We are encouraged by the company’s aggressive expansion efforts to develop its Tim Hortons brand in the Cincinnati area over the next 10 years. The company is also focusing on enhancing guest experience and increasing franchisee profitability to create value for all of its stakeholders.
Comps at both the brands – Tim Hortons and Burger King – have shown considerable year-over-year improvement in the last few quarters backed by menu innovation, re-imaging and premium offerings. These initiatives to boost sales should aid second-quarter results as well.
However, costs incurred to execute the sales initiatives are taking a toll on the company’s profits. Also, costs incurred to establish both the brands in new markets might dent profits in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Restaurant Brands is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Its Earnings ESP stands at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate stand at 35 cents.
Zacks Rank: Restaurant Brands has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement.
Stocks to Consider
Here are some companies in the restaurant industry that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) , with an Earnings ESP of +2.27% and a Zacks Rank #1.
Jack in the Box Inc. (JACK - Free Report) , with an Earnings ESP of +1.15% and a Zacks Rank #2.
Shake Shack, Inc. (SHAK - Free Report) , with an Earnings ESP of +7.69% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Restaurant Brands (QSR) Q2 Earnings: What's in Store?
Restaurant Brands International Inc. (QSR - Free Report) is set to report second-quarter 2016 results on Aug 4, before the market opens. Last quarter, this quick service restaurant company posted a positive earnings surprise of 50.00%.
In fact, the company has delivered average positive earnings surprise of 17.63% in the trailing four quarters.
Headquartered in Miami, FL, Restaurant Brands came into existence with the merger of Tim Hortons Inc. and Burger King Worldwide Inc. It is now the parent company of these two iconic quick service restaurant brands. These independently operated brands have been serving customers for more than 50 years.
RESTAURANT BRND Price and EPS Surprise
RESTAURANT BRND Price and EPS Surprise | RESTAURANT BRND Quote
Let’s see how things are shaping up for this announcement.
Factors to Consider
We are encouraged by the company’s aggressive expansion efforts to develop its Tim Hortons brand in the Cincinnati area over the next 10 years. The company is also focusing on enhancing guest experience and increasing franchisee profitability to create value for all of its stakeholders.
Comps at both the brands – Tim Hortons and Burger King – have shown considerable year-over-year improvement in the last few quarters backed by menu innovation, re-imaging and premium offerings. These initiatives to boost sales should aid second-quarter results as well.
However, costs incurred to execute the sales initiatives are taking a toll on the company’s profits. Also, costs incurred to establish both the brands in new markets might dent profits in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Restaurant Brands is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Its Earnings ESP stands at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate stand at 35 cents.
Zacks Rank: Restaurant Brands has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement.
Stocks to Consider
Here are some companies in the restaurant industry that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) , with an Earnings ESP of +2.27% and a Zacks Rank #1.
Jack in the Box Inc. (JACK - Free Report) , with an Earnings ESP of +1.15% and a Zacks Rank #2.
Shake Shack, Inc. (SHAK - Free Report) , with an Earnings ESP of +7.69% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>