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What's in Store for Restaurant Brands' (QSR) Q3 Earnings?

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Restaurant Brands International Inc. (QSR - Free Report) is scheduled to report third-quarter 2021 results on Oct 25, before market open.

In the last reported quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 24.2% and 4.9%, increasing 133.3% and 37.2% on a year-over-year basis, respectively.

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings is pegged at 75 cents per share, indicating a 10.3% increase from earnings of 68 cents recorded in the year-ago quarter. For revenues, the consensus mark is pegged at $1,511 million, suggesting a rise of 13% from the year-ago figure.

Let's take a look at how things have shaped up in the quarter.

Factors at Play

The company’s third-quarter 2021 performance is expected to have been driven by its quality menu items, rapid adoption of digital channels by guests and an acceleration in new restaurant openings worldwide by its franchisees. Also, the company’s revenues are expected to have been driven by strong brand-building efforts and a rapidly growing business model.

Moreover, the company’s continued improvement in global system-wide sales and comparable sales is likely to have benefited third-quarter 2021 performance. Quarterly comps are likely to have been driven by strong digitalization and emphasis on omnichannel guest experience through loyalty programs.

However, the coronavirus pandemic is expected to have materially affected Restaurant Brands’ financial performance in third-quarter 2021. The restaurant industry has been facing declining traffic for quite some time now.

 

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Restaurant Brands this time around. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here, as you will see below.

Earnings ESP: Restaurant Brands has an Earnings ESP of -4.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Restaurant Brands currently carries a Zacks Rank #3.

Stocks With Favorable Combination

Here are a few companies in the Zacks Retail – Restaurants industry which have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Denny's Corporation (DENN - Free Report) has an Earnings ESP of +15.15% and a Zacks Rank #1.

Noodles & Company (NDLS - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #2.

Papa John's International, Inc. (PZZA - Free Report) has an Earnings ESP of +5.07% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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