We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Restaurant Brands Rides on Unit Expansion Amid Competition
Read MoreHide Full Article
Restaurant Brands International Inc. (QSR - Free Report) banks on various sales-building efforts, menu innovation, digitalization and expansion strategy. Supported by these initiatives, the company’s shares have gained 28.6% so far this year compared with the industry’s 17.4% rally.
However, greater dependence on franchisees and intense competition are potential headwinds. Let’s delve deeper into the factors that substantiate its Zacks Rank #3 (Hold).
Expansion Efforts — Key Growth Driver
Restaurant Brands believes that there is a huge opportunity to grow all its brands around the world by expanding presence in existing markets and entering new markets. It continues to evaluate opportunities to speed up international development of all the three brands by establishing master franchisees with exclusive development rights, and joint ventures with new and existing franchisees.
Currently, the company has more than 26,000 restaurants worldwide, which includes in excess of 18,000 restaurants at Burger King. System-wide sales grew approximately 8% in the last reported quarter.
Restaurant Brands is encouraged by long-term prospects of the Tim Hortons brand and remains committed to keep up with the international growth strategy of expanding the brand around the world. In this regard, it formed master franchise joint venture partnerships for the brand in Mexico and Spain. Moreover, the company is optimistic about the major expansion opportunity that lies ahead for the brand in the United States. The regions where the company has signed development agreements include Cincinnati, Columbus, Indianapolis, Minneapolis, Cleveland and Youngstown.
During the third quarter, the company reinvented the donut lineup with premium donuts that include maple bacon dream donut and the PB&J dream donut. It also plans to roll out these dream donuts across Canada.
Meanwhile, Restaurant Brands is investing heavily in technology-driven initiatives like digital ordering to boost sales. Furthermore, Restaurant Brands launched Burger King mobile order and pay app in the United States. The company continues to expand the size of its delivery program, with availability in nearly 3,500 restaurants in the United States and more than 8,700 restaurants worldwide.
Concerns
Although the company’s fully-franchised model has a lot of positives, it also has its share of drawbacks and risks. Under this business model, the company’s prospects depend on the ability to attract new franchisees for all brands, and the willingness of franchisees to open restaurants in existing and new markets.
Competition among fast-casual, quick-service and casual dining segments of the restaurant industry is expected to remain fierce with respect to price, food quality, service, location and concept, which may adversely impact Restaurant Brands’ revenues.
Earnings estimates for the current year and 2020 have been revised 0.4% and 0.7% downward, respectively, over the past 30 days.
Key Picks
Some better-ranked stocks in the same space include Chuy's Holdings, Inc. (CHUY - Free Report) , Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) and Dunkin' Brands Group, Inc. . While Chuy’s and Cracker sport a Zacks Rank #1 (Strong Buy), Dunkin’ carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chuy, Cracker Barrel and Dunkin’ have an impressive long-term earnings growth rate of 17.5%, 10% and 9.8%, respectively.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our just-released Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Image: Bigstock
Restaurant Brands Rides on Unit Expansion Amid Competition
Restaurant Brands International Inc. (QSR - Free Report) banks on various sales-building efforts, menu innovation, digitalization and expansion strategy. Supported by these initiatives, the company’s shares have gained 28.6% so far this year compared with the industry’s 17.4% rally.
However, greater dependence on franchisees and intense competition are potential headwinds. Let’s delve deeper into the factors that substantiate its Zacks Rank #3 (Hold).
Expansion Efforts — Key Growth Driver
Restaurant Brands believes that there is a huge opportunity to grow all its brands around the world by expanding presence in existing markets and entering new markets. It continues to evaluate opportunities to speed up international development of all the three brands by establishing master franchisees with exclusive development rights, and joint ventures with new and existing franchisees.
Currently, the company has more than 26,000 restaurants worldwide, which includes in excess of 18,000 restaurants at Burger King. System-wide sales grew approximately 8% in the last reported quarter.
Restaurant Brands is encouraged by long-term prospects of the Tim Hortons brand and remains committed to keep up with the international growth strategy of expanding the brand around the world. In this regard, it formed master franchise joint venture partnerships for the brand in Mexico and Spain. Moreover, the company is optimistic about the major expansion opportunity that lies ahead for the brand in the United States. The regions where the company has signed development agreements include Cincinnati, Columbus, Indianapolis, Minneapolis, Cleveland and Youngstown.
During the third quarter, the company reinvented the donut lineup with premium donuts that include maple bacon dream donut and the PB&J dream donut. It also plans to roll out these dream donuts across Canada.
Meanwhile, Restaurant Brands is investing heavily in technology-driven initiatives like digital ordering to boost sales. Furthermore, Restaurant Brands launched Burger King mobile order and pay app in the United States. The company continues to expand the size of its delivery program, with availability in nearly 3,500 restaurants in the United States and more than 8,700 restaurants worldwide.
Concerns
Although the company’s fully-franchised model has a lot of positives, it also has its share of drawbacks and risks. Under this business model, the company’s prospects depend on the ability to attract new franchisees for all brands, and the willingness of franchisees to open restaurants in existing and new markets.
Competition among fast-casual, quick-service and casual dining segments of the restaurant industry is expected to remain fierce with respect to price, food quality, service, location and concept, which may adversely impact Restaurant Brands’ revenues.
Earnings estimates for the current year and 2020 have been revised 0.4% and 0.7% downward, respectively, over the past 30 days.
Key Picks
Some better-ranked stocks in the same space include Chuy's Holdings, Inc. (CHUY - Free Report) , Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) and Dunkin' Brands Group, Inc. . While Chuy’s and Cracker sport a Zacks Rank #1 (Strong Buy), Dunkin’ carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chuy, Cracker Barrel and Dunkin’ have an impressive long-term earnings growth rate of 17.5%, 10% and 9.8%, respectively.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our just-released Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Download Free Report Now >>