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Restaurant Brands (QSR) Q1 Earnings & Sales Top Estimates
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Restaurant Brands International, Inc. (QSR - Free Report) reported better-than-expected results in the first quarter of 2017, wherein both the top line and the bottom line outpaced the Zacks Consensus Estimate.
Shares of the company declined 3.1% in the trading session following the results announcement as the company witnessed a decline in comps at all of its segments.
Recent Developments
In Feb 2017, Restaurant Brands inked a definitive agreement to acquire Popeye’s Louisiana Kitchen for $79.00 per share in cash, or $1.8 billion. The transaction closed on Mar 27, 2017, upon completion of the customary closing conditions.
Popeye’s is one of the largest quick service restaurant chicken concepts in the world with over 2,600 restaurants in the U.S. and 25 other countries. Its global footprint will thus complement Restaurant Brands’ existing portfolio of over 20,000 restaurants worldwide.
Building on the momentum of recent years, Restaurant Brands plans to carry on developing the brand at an increasing pace in the U.S. and international markets. The acquisition of Popeye’s will thus add a booming, highly-regarded brand to Restaurant Brands that has a distinctive position within a compelling segment along with strong customer loyalty and riveting prospects for growth in the U.S. and internationally. The acquisition is thus likely to lead to accelerated global unit development and also aid in cutting costs, thereby proving accretive to earnings.
Earnings and Revenue Discussion
Adjusted earnings of 36 cents per share beat the Zacks Consensus Estimate of 35 cents by 2.9% and jumped 20% year over year on higher revenues.
Revenues of $1.0 billion increased nearly 9% year over year on the back of higher system-wide sales as well as franchise and property revenues. Further, revenues beat the consensus mark of $972 million by nearly 3%.
Inside the Headline Numbers
Restaurant Brands operates through three segments – Tim Hortons, Burger King and the recently acquired Popeye’s Louisiana Kitchen.
Tim Hortons
Tim Hortons reported revenues of $733.6 million, reflecting a rise of 11.5% over the prior-year quarter, primarily due to system-wide sales growth.
System-wide sales increased 3.3%, much lower than 7.9% growth recorded in the year-ago comparable period but higher than the 2.4% posted in the last quarter.
Comps at this segment declined 0.1% in the quarter versus 5.6% growth in the prior-year quarter and 0.2% growth in the preceding quarter.
Burger King
Burger King’s revenues were up 2.4% from the prior-year quarter to $267.0 million, mainly on the back of system-wide sales growth.
System-wide sales rose 6.2%, lower than 10% growth recorded in the year-ago comparable period and 8.5% increase recorded in the preceding quarter.
Comps at the Burger King division declined 0.1% in the quarter versus 4.6% growth in the prior-year quarter and 2.8% growth in the last quarter.
Popeye’s Louisiana Kitchen
As this segment was acquired by Restaurant Brands on Mar 27, 2017, its results are immaterial to be included in the company’s first-quarter 2017 performance, which ended on Mar 30, 2017. This division is likely to provide detailed results from second quarter onwards.
For informational purposes, it was noted that comps at Popeye’s Louisiana Kitchen restaurants declined 0.2% year over year for the period of three months that ended on Mar 30, 2017.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Other well-performing stocks in the restaurants space include:
YUM! China Holdings, Inc. (YUMC - Free Report) has seen current quarter and current year earnings estimates rise 4.5% and 5.2% respectively, over the last 60 days. It is also sports a Zacks Rank #1.
Papa Murphy’s Holdings, Inc. (FRSH - Free Report) is another Zacks Rank #1 company. It has seen current year and next year earnings estimates rise 50% and 500% respectively in the past two months.
Darden Restaurants, Inc.’s (DRI - Free Report) earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 3.35%. It currently holds a Zacks Rank #2 (Buy).
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
Unique Zacks Analysis of Your Chosen Ticker
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Restaurant Brands (QSR) Q1 Earnings & Sales Top Estimates
Restaurant Brands International, Inc. (QSR - Free Report) reported better-than-expected results in the first quarter of 2017, wherein both the top line and the bottom line outpaced the Zacks Consensus Estimate.
Shares of the company declined 3.1% in the trading session following the results announcement as the company witnessed a decline in comps at all of its segments.
Recent Developments
In Feb 2017, Restaurant Brands inked a definitive agreement to acquire Popeye’s Louisiana Kitchen for $79.00 per share in cash, or $1.8 billion. The transaction closed on Mar 27, 2017, upon completion of the customary closing conditions.
Popeye’s is one of the largest quick service restaurant chicken concepts in the world with over 2,600 restaurants in the U.S. and 25 other countries. Its global footprint will thus complement Restaurant Brands’ existing portfolio of over 20,000 restaurants worldwide.
Building on the momentum of recent years, Restaurant Brands plans to carry on developing the brand at an increasing pace in the U.S. and international markets. The acquisition of Popeye’s will thus add a booming, highly-regarded brand to Restaurant Brands that has a distinctive position within a compelling segment along with strong customer loyalty and riveting prospects for growth in the U.S. and internationally. The acquisition is thus likely to lead to accelerated global unit development and also aid in cutting costs, thereby proving accretive to earnings.
Earnings and Revenue Discussion
Adjusted earnings of 36 cents per share beat the Zacks Consensus Estimate of 35 cents by 2.9% and jumped 20% year over year on higher revenues.
Revenues of $1.0 billion increased nearly 9% year over year on the back of higher system-wide sales as well as franchise and property revenues. Further, revenues beat the consensus mark of $972 million by nearly 3%.
Inside the Headline Numbers
Restaurant Brands operates through three segments – Tim Hortons, Burger King and the recently acquired Popeye’s Louisiana Kitchen.
Tim Hortons
Tim Hortons reported revenues of $733.6 million, reflecting a rise of 11.5% over the prior-year quarter, primarily due to system-wide sales growth.
System-wide sales increased 3.3%, much lower than 7.9% growth recorded in the year-ago comparable period but higher than the 2.4% posted in the last quarter.
Comps at this segment declined 0.1% in the quarter versus 5.6% growth in the prior-year quarter and 0.2% growth in the preceding quarter.
Burger King
Burger King’s revenues were up 2.4% from the prior-year quarter to $267.0 million, mainly on the back of system-wide sales growth.
System-wide sales rose 6.2%, lower than 10% growth recorded in the year-ago comparable period and 8.5% increase recorded in the preceding quarter.
Comps at the Burger King division declined 0.1% in the quarter versus 4.6% growth in the prior-year quarter and 2.8% growth in the last quarter.
Popeye’s Louisiana Kitchen
As this segment was acquired by Restaurant Brands on Mar 27, 2017, its results are immaterial to be included in the company’s first-quarter 2017 performance, which ended on Mar 30, 2017. This division is likely to provide detailed results from second quarter onwards.
For informational purposes, it was noted that comps at Popeye’s Louisiana Kitchen restaurants declined 0.2% year over year for the period of three months that ended on Mar 30, 2017.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands International Inc. Price, Consensus and EPS Surprise | Restaurant Brands International Inc. Quote
Zacks Rank & Stocks to Consider
Restaurant Brands currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Other well-performing stocks in the restaurants space include:
YUM! China Holdings, Inc. (YUMC - Free Report) has seen current quarter and current year earnings estimates rise 4.5% and 5.2% respectively, over the last 60 days. It is also sports a Zacks Rank #1.
Papa Murphy’s Holdings, Inc. (FRSH - Free Report) is another Zacks Rank #1 company. It has seen current year and next year earnings estimates rise 50% and 500% respectively in the past two months.
Darden Restaurants, Inc.’s (DRI - Free Report) earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 3.35%. It currently holds a Zacks Rank #2 (Buy).
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>