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Restaurant Brands (QSR) Q4 Earnings Miss Estimates, Fall Y/Y
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Restaurant Brands International, Inc. (QSR - Free Report) reported fourth-quarter 2020 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. However, the top and the bottom line declined on a year-over-year basis.
The company’s adjusted earnings of 53 cents per share missed the Zacks Consensus Estimate of 66 cents by 19.7%. Moreover, the bottom line fell 29.3% from the prior-year quarter’s figure of 75 cents.
During the fourth quarter, net revenues of $1,358 million surpassed the consensus mark of $1,345 million. However, the top line declined 8.2% on a year-over-year basis, primarily due to a drop in system-wide sales in the Tim Hortons, Burger King and Popeyes segments. This along with decline in supply chain sales was partially offset by favorable foreign exchange (FX) movements. Following the results, the company’s shares dropped 1.6% during trading hours on Feb 11.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands operates through three segments — Tim Hortons, Burger King and Popeye’s Louisiana Kitchen.
During fourth-quarter 2020, revenues in Tim Hortons totaled $782 million compared with $872 million in the prior-year quarter. System-wide sales declined 12.9% compared with 2.9% fall in the prior-year quarter. Comps in the segment declined 11% compared with 4.3% fall in the prior-year quarter. The downtick was primarily caused by lower system-wide sales and supply chain sales. It was also negatively impacted by unfavorable FX movements. In the quarter, net restaurant growth was recorded at 0.3% compared with 1.8% in the prior-year quarter.
Burger King’s revenues totaled $434 million in fourth-quarter 2020 compared with $462 million in the prior-year quarter. The downside was primarily because of decline in system-wide sales along with negative FX movements. Also, system-wide sales declined 8.1% against 8.4% growth in the prior-year quarter. Comps in the segment also declined 7.9% against 2.8% growth in the prior-year quarter. In the fourth quarter, net restaurant growth was recorded at (1.1%) against growth of 5.9% reported in the prior-year quarter.
Popeye’s Louisiana Kitchen reported revenues of $142 million in the fourth quarter of 2020 compared with $145 million in the prior-year quarter. System-wide sales declined 0.9% against 42.3% increase recorded in the prior-year quarter. Meanwhile, net restaurant growth came in at 4.1% compared with 6.9% growth in the prior-year quarter. Comps in the segment fell 5.8% against 34.4% growth in the prior-year quarter.
Operating Performance
In the quarter under review, the company’s adjusted EBITDA declined 19.5% year over year to $501 million. On an organic basis, the downside was primarily driven by a decline in Tim Hortons and Burger King adjusted EBITDA.
Segment-wise, Tim Horton’s adjusted EBITDA declined 22.9% from the year-ago quarter’s tally. Burger King’s adjusted EBITDA fell 18% year over year. Meanwhile, Popeye’s adjusted EBITDA fell 8.5% from the year-ago quarter’s levels.
Cash and Capital
Restaurant Brands ended the fourth quarter with cash and cash equivalent balance of $1,560 million compared with $1,533 million in the prior-year quarter. As of Dec 31, 2020, its total debt was approximately $13 billion compared with $12.3 billion as on Dec 31, 2019. The company’s board of directors announced a dividend of 53 cents per common share and partnership exchangeable unit of RBI LP for first-quarter 2021. The dividend is payable on Apr 6, 2021, to shareholders of record at the close of business as of Mar 23, 2021.
Other Updates
As of December-end, 96% of the company’s restaurants remained open worldwide that included all restaurants in North America and Asia Pacific. Meanwhile, 94% of the restaurants remained open in Europe, Middle East and Africa.
2020 Highlights
Total revenues in 2020 came in at $4,968 million compared with $5,603 million in 2019.
Adjusted EBITDA in 2020 came in at $1,864 compared with $2,304 in 2019.
In 2020, adjusted earnings per share (EPS) came in at $2.03 compared with $2.72 in the previous year.
Yum! Brands, Inc. (YUM - Free Report) reported strong fourth-quarter 2020 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics improved year over year. The company’s adjusted earnings of $1.15 beat the Zacks Consensus Estimate of 99 cents. In the prior-year quarter, the company had reported adjusted earnings of $1.00. Quarterly revenues of $1,743 million surpassed the consensus estimate of $1,731 million. The top line also improved 3% year over year. The upside can be attributed to increase in company sales.
McDonald's Corporation (MCD - Free Report) reported fourth-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. The company reported adjusted earnings of $1.70 per share, which missed the Zacks Consensus Estimate of $1.75. Moreover, the bottom line declined 14% year over year. Quarterly revenues of $5,313.8 million missed the Zacks Consensus Estimate of $5,320 million. Moreover, the top line declined 2% year over year. This downtick was caused by the coronavirus pandemic.
Starbucks Corporation (SBUX - Free Report) reported first-quarter fiscal 2021 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The company reported adjusted EPS of 61 cents, which beat the Zacks Consensus Estimate of 55 cents. In the prior-year quarter, the company had reported adjusted EPS of 79 cents. Meanwhile, quarterly revenues of $6,749.4 million missed the Zacks Consensus Estimate of $6,873 million. Moreover, the top line fell 4.9% from the year-ago quarter’s levels. The downside was due to dismal global retail and comparable sales as well as decline in store traffic.
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Restaurant Brands (QSR) Q4 Earnings Miss Estimates, Fall Y/Y
Restaurant Brands International, Inc. (QSR - Free Report) reported fourth-quarter 2020 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. However, the top and the bottom line declined on a year-over-year basis.
The company’s adjusted earnings of 53 cents per share missed the Zacks Consensus Estimate of 66 cents by 19.7%. Moreover, the bottom line fell 29.3% from the prior-year quarter’s figure of 75 cents.
During the fourth quarter, net revenues of $1,358 million surpassed the consensus mark of $1,345 million. However, the top line declined 8.2% on a year-over-year basis, primarily due to a drop in system-wide sales in the Tim Hortons, Burger King and Popeyes segments. This along with decline in supply chain sales was partially offset by favorable foreign exchange (FX) movements. Following the results, the company’s shares dropped 1.6% during trading hours on Feb 11.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands International Inc. price-consensus-eps-surprise-chart | Restaurant Brands International Inc. Quote
Segmental Revenues
Restaurant Brands operates through three segments — Tim Hortons, Burger King and Popeye’s Louisiana Kitchen.
During fourth-quarter 2020, revenues in Tim Hortons totaled $782 million compared with $872 million in the prior-year quarter. System-wide sales declined 12.9% compared with 2.9% fall in the prior-year quarter. Comps in the segment declined 11% compared with 4.3% fall in the prior-year quarter. The downtick was primarily caused by lower system-wide sales and supply chain sales. It was also negatively impacted by unfavorable FX movements. In the quarter, net restaurant growth was recorded at 0.3% compared with 1.8% in the prior-year quarter.
Burger King’s revenues totaled $434 million in fourth-quarter 2020 compared with $462 million in the prior-year quarter. The downside was primarily because of decline in system-wide sales along with negative FX movements. Also, system-wide sales declined 8.1% against 8.4% growth in the prior-year quarter. Comps in the segment also declined 7.9% against 2.8% growth in the prior-year quarter. In the fourth quarter, net restaurant growth was recorded at (1.1%) against growth of 5.9% reported in the prior-year quarter.
Popeye’s Louisiana Kitchen reported revenues of $142 million in the fourth quarter of 2020 compared with $145 million in the prior-year quarter. System-wide sales declined 0.9% against 42.3% increase recorded in the prior-year quarter. Meanwhile, net restaurant growth came in at 4.1% compared with 6.9% growth in the prior-year quarter. Comps in the segment fell 5.8% against 34.4% growth in the prior-year quarter.
Operating Performance
In the quarter under review, the company’s adjusted EBITDA declined 19.5% year over year to $501 million. On an organic basis, the downside was primarily driven by a decline in Tim Hortons and Burger King adjusted EBITDA.
Segment-wise, Tim Horton’s adjusted EBITDA declined 22.9% from the year-ago quarter’s tally. Burger King’s adjusted EBITDA fell 18% year over year. Meanwhile, Popeye’s adjusted EBITDA fell 8.5% from the year-ago quarter’s levels.
Cash and Capital
Restaurant Brands ended the fourth quarter with cash and cash equivalent balance of $1,560 million compared with $1,533 million in the prior-year quarter. As of Dec 31, 2020, its total debt was approximately $13 billion compared with $12.3 billion as on Dec 31, 2019. The company’s board of directors announced a dividend of 53 cents per common share and partnership exchangeable unit of RBI LP for first-quarter 2021. The dividend is payable on Apr 6, 2021, to shareholders of record at the close of business as of Mar 23, 2021.
Other Updates
As of December-end, 96% of the company’s restaurants remained open worldwide that included all restaurants in North America and Asia Pacific. Meanwhile, 94% of the restaurants remained open in Europe, Middle East and Africa.
2020 Highlights
Total revenues in 2020 came in at $4,968 million compared with $5,603 million in 2019.
Adjusted EBITDA in 2020 came in at $1,864 compared with $2,304 in 2019.
In 2020, adjusted earnings per share (EPS) came in at $2.03 compared with $2.72 in the previous year.
Zacks Rank
Restaurant Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Yum! Brands, Inc. (YUM - Free Report) reported strong fourth-quarter 2020 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics improved year over year. The company’s adjusted earnings of $1.15 beat the Zacks Consensus Estimate of 99 cents. In the prior-year quarter, the company had reported adjusted earnings of $1.00. Quarterly revenues of $1,743 million surpassed the consensus estimate of $1,731 million. The top line also improved 3% year over year. The upside can be attributed to increase in company sales.
McDonald's Corporation (MCD - Free Report) reported fourth-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. The company reported adjusted earnings of $1.70 per share, which missed the Zacks Consensus Estimate of $1.75. Moreover, the bottom line declined 14% year over year. Quarterly revenues of $5,313.8 million missed the Zacks Consensus Estimate of $5,320 million. Moreover, the top line declined 2% year over year. This downtick was caused by the coronavirus pandemic.
Starbucks Corporation (SBUX - Free Report) reported first-quarter fiscal 2021 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The company reported adjusted EPS of 61 cents, which beat the Zacks Consensus Estimate of 55 cents. In the prior-year quarter, the company had reported adjusted EPS of 79 cents. Meanwhile, quarterly revenues of $6,749.4 million missed the Zacks Consensus Estimate of $6,873 million. Moreover, the top line fell 4.9% from the year-ago quarter’s levels. The downside was due to dismal global retail and comparable sales as well as decline in store traffic.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>