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Restaurant Brands' (QSR) Q4 Earnings Match Estimates, Falls Y/Y
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Restaurant Brands International, Inc. (QSR - Free Report) reported decent fourth-quarter 2022 results, with earnings meeting the Zacks Consensus Estimate and revenues surpassing the same. The top line rose year over year, while the bottom line declined from the prior-year quarter's figure.
Following the results, the company’s shares dropped 2.7% during trading hours on Feb 14. Negative investor sentiments were witnessed as the management cited concerns about an uncertain operating environment because of inflationary pressures, pandemic-induced restrictions (in certain markets) and the war in Ukraine.
Earnings & Revenue Discussion
During fourth-quarter 2022, the company reported adjusted earnings per share (EPS) of 72 cents, in line with the Zacks Consensus Estimate. The bottom line fell 2.7% from an adjusted EPS of 74 cents reported in the prior-year quarter.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Quarterly net revenues of $1,689 million surpassed the consensus mark of $1,668 million. The top line increased 9.2% on a year-over-year basis. The upside was driven by a rise in system-wide sales at Tim Hortons (or TH), Burger King (BK) and Popeyes (PLK). This and the inclusion of Firehouse Subs (FHS) added to the upside. However, this was partially offset by unfavorable FX movements. During the quarter, digital sales increased 24% year over year to approximately $3.5 billion.
Segmental Revenues
Restaurant Brands operates through four segments — Tim Hortons, Burger King, Popeye’s Louisiana Kitchen and Firehouse Subs.
In the fourth quarter, revenues in Tim Hortons totaled $993 million, up 8.3% from the prior-year quarter’s levels. System-wide sales increased 12.3% year over year compared with growth of 14% reported in the prior-year quarter. Comps in the segment rose 9.4% year over year compared with a 10.3% rise reported in the year-ago quarter. In the quarter under review, net restaurant growth was recorded at 5.8% compared with a rise of 6.9% reported in the prior-year quarter.
During the quarter, Burger King’s revenues totaled $490 million, indicating growth of 2.1% from the prior-year quarter’s levels. System-wide sales growth in the segment increased 11.8% year over year compared with a 15.4% growth reported in the prior-year quarter. Comps rose 8.4% year over year compared with growth of 11.3% reported in the prior-year quarter. In the third quarter, net restaurant growth was 2.8% compared with an increase of 3.3% reported in the prior-year quarter.
Popeye’s Louisiana Kitchen generated revenues of $170 million in third-quarter 2022, up 17.3% from the prior-year quarter’s levels. System-wide sales growth came in at 11.2% year over year compared with a 7.2% growth recorded in the prior-year quarter. Comps in the segment rose 3.8% year over year against a 0.4% decline reported in the prior-year quarter. Net restaurant growth came in at 10.4% compared with a 7.4% growth reported in the prior-year quarter.
During the quarter, Firehouse Subs generated revenues of $36 million compared with $5 million reported in the prior-year quarter. System-wide sales growth came in at 3.9% year over year compared with 18.1% recorded in the prior-year quarter. Net restaurant growth came in at 2.4% year over year compared with an increase of 2.5% reported in the previous quarter. Comps in the segment rose 0.4% year over year compared with a 14.7% rise reported in the prior-year quarter.
Operating Performance
In the quarter under review, the company’s adjusted EBITDA came in at $588 million compared with $584 million reported in the prior-year quarter. On a reported basis, the upside was driven by increases in TH, FHS and PLK Adjusted EBITDA. However, this was partially offset by unfavorable FX movements and a fall in BK Adjusted EBITDA.
Segment-wise, Tim Horton’s adjusted EBITDA increased 1.9% year over year to $263 million. Burger King’s adjusted EBITDA fell 7.7% year over year to $246 million. Popeye’s adjusted EBITDA came in at $63 million, up 10.4% year over year. During the quarter, adjusted EBITDA from the Firehouse Subs came in at $16 million.
Cash and Capital
Restaurant Brands ended the fourth quarter with a cash and cash equivalent balance of $1,178 million compared with $946 million reported in the previous quarter. As of Dec 31, 2022, long-term debt (net of current portion) stood at $12,839 million, compared with $12, 853 million reported in the previous quarter.
The company’s board of directors announced a dividend payout of 55 cents per common share and partnership exchangeable unit of Restaurant Brands International Limited Partnership in the first quarter of 2023. The dividend is payable on Apr 5, 2023, to shareholders of record at the close of business as of Mar 22, 2023.
2022 Highlights
Total revenues in 2022 amounted to $6,505 million compared with $5,739 million in 2021.
Adjusted EBITDA in 2022 came in at $2,378 million compared with $2,248 million in 2021.
In 2022, diluted EPS came in at $3.14 per share compared with $2.82 reported in the previous year.
Arcos Dorados sports a Zacks Rank #1. ARCO has a long-term earnings growth of 11.6%. Shares of the company have increased 16.8% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s levels.
Brinker carries a Zacks Rank #2 (Buy). EAT has a long-term earnings growth rate of 7.1%. The stock has declined 5.8% in the past year.
The Zacks Consensus Estimate for Brinker’s 2024 sales and EPS suggests growth of 4.1% and 37.6%, respectively, from the year-ago period’s reported levels.
Darden carries a Zacks Rank #2. DRI has a long-term earnings growth rate of 9.8%. Shares of DRI have declined 1.7% in the past year.
The Zacks Consensus Estimate for Darden’s 2023 sales and EPS suggests growth of 7.9% and 5.4%, respectively, from the year-ago period’s reported levels.
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Restaurant Brands' (QSR) Q4 Earnings Match Estimates, Falls Y/Y
Restaurant Brands International, Inc. (QSR - Free Report) reported decent fourth-quarter 2022 results, with earnings meeting the Zacks Consensus Estimate and revenues surpassing the same. The top line rose year over year, while the bottom line declined from the prior-year quarter's figure.
Following the results, the company’s shares dropped 2.7% during trading hours on Feb 14. Negative investor sentiments were witnessed as the management cited concerns about an uncertain operating environment because of inflationary pressures, pandemic-induced restrictions (in certain markets) and the war in Ukraine.
Earnings & Revenue Discussion
During fourth-quarter 2022, the company reported adjusted earnings per share (EPS) of 72 cents, in line with the Zacks Consensus Estimate. The bottom line fell 2.7% from an adjusted EPS of 74 cents reported in the prior-year quarter.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands International Inc. price-consensus-eps-surprise-chart | Restaurant Brands International Inc. Quote
Quarterly net revenues of $1,689 million surpassed the consensus mark of $1,668 million. The top line increased 9.2% on a year-over-year basis. The upside was driven by a rise in system-wide sales at Tim Hortons (or TH), Burger King (BK) and Popeyes (PLK). This and the inclusion of Firehouse Subs (FHS) added to the upside. However, this was partially offset by unfavorable FX movements. During the quarter, digital sales increased 24% year over year to approximately $3.5 billion.
Segmental Revenues
Restaurant Brands operates through four segments — Tim Hortons, Burger King, Popeye’s Louisiana Kitchen and Firehouse Subs.
In the fourth quarter, revenues in Tim Hortons totaled $993 million, up 8.3% from the prior-year quarter’s levels. System-wide sales increased 12.3% year over year compared with growth of 14% reported in the prior-year quarter. Comps in the segment rose 9.4% year over year compared with a 10.3% rise reported in the year-ago quarter. In the quarter under review, net restaurant growth was recorded at 5.8% compared with a rise of 6.9% reported in the prior-year quarter.
During the quarter, Burger King’s revenues totaled $490 million, indicating growth of 2.1% from the prior-year quarter’s levels. System-wide sales growth in the segment increased 11.8% year over year compared with a 15.4% growth reported in the prior-year quarter. Comps rose 8.4% year over year compared with growth of 11.3% reported in the prior-year quarter. In the third quarter, net restaurant growth was 2.8% compared with an increase of 3.3% reported in the prior-year quarter.
Popeye’s Louisiana Kitchen generated revenues of $170 million in third-quarter 2022, up 17.3% from the prior-year quarter’s levels. System-wide sales growth came in at 11.2% year over year compared with a 7.2% growth recorded in the prior-year quarter. Comps in the segment rose 3.8% year over year against a 0.4% decline reported in the prior-year quarter. Net restaurant growth came in at 10.4% compared with a 7.4% growth reported in the prior-year quarter.
During the quarter, Firehouse Subs generated revenues of $36 million compared with $5 million reported in the prior-year quarter. System-wide sales growth came in at 3.9% year over year compared with 18.1% recorded in the prior-year quarter. Net restaurant growth came in at 2.4% year over year compared with an increase of 2.5% reported in the previous quarter. Comps in the segment rose 0.4% year over year compared with a 14.7% rise reported in the prior-year quarter.
Operating Performance
In the quarter under review, the company’s adjusted EBITDA came in at $588 million compared with $584 million reported in the prior-year quarter. On a reported basis, the upside was driven by increases in TH, FHS and PLK Adjusted EBITDA. However, this was partially offset by unfavorable FX movements and a fall in BK Adjusted EBITDA.
Segment-wise, Tim Horton’s adjusted EBITDA increased 1.9% year over year to $263 million. Burger King’s adjusted EBITDA fell 7.7% year over year to $246 million. Popeye’s adjusted EBITDA came in at $63 million, up 10.4% year over year. During the quarter, adjusted EBITDA from the Firehouse Subs came in at $16 million.
Cash and Capital
Restaurant Brands ended the fourth quarter with a cash and cash equivalent balance of $1,178 million compared with $946 million reported in the previous quarter. As of Dec 31, 2022, long-term debt (net of current portion) stood at $12,839 million, compared with $12, 853 million reported in the previous quarter.
The company’s board of directors announced a dividend payout of 55 cents per common share and partnership exchangeable unit of Restaurant Brands International Limited Partnership in the first quarter of 2023. The dividend is payable on Apr 5, 2023, to shareholders of record at the close of business as of Mar 22, 2023.
2022 Highlights
Total revenues in 2022 amounted to $6,505 million compared with $5,739 million in 2021.
Adjusted EBITDA in 2022 came in at $2,378 million compared with $2,248 million in 2021.
In 2022, diluted EPS came in at $3.14 per share compared with $2.82 reported in the previous year.
Zacks Rank & Key Picks
Restaurant Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail – Restaurants industry are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Brinker International, Inc. (EAT - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) .
Arcos Dorados sports a Zacks Rank #1. ARCO has a long-term earnings growth of 11.6%. Shares of the company have increased 16.8% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s levels.
Brinker carries a Zacks Rank #2 (Buy). EAT has a long-term earnings growth rate of 7.1%. The stock has declined 5.8% in the past year.
The Zacks Consensus Estimate for Brinker’s 2024 sales and EPS suggests growth of 4.1% and 37.6%, respectively, from the year-ago period’s reported levels.
Darden carries a Zacks Rank #2. DRI has a long-term earnings growth rate of 9.8%. Shares of DRI have declined 1.7% in the past year.
The Zacks Consensus Estimate for Darden’s 2023 sales and EPS suggests growth of 7.9% and 5.4%, respectively, from the year-ago period’s reported levels.