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Restaurant Brands' (QSR) Burger King to Invest $400M in 2 Years

·3 min read

In an effort to drive sales and franchisee profitability, Restaurant Brands International Inc.’s QSR Burger King plans to invest $400 million over two years. The company shared the details of its “Reclaim the Flame” plan.

The company will invest $150M in advertising and digital investments to "Fuel the Flame" as well as $250M for a “Royal Reset”. The company’s “Royal Reset” plan includes restaurant technology, kitchen equipment, building developments and high-quality remodels and relocations.

Jose Cil, CEO of Restaurant Brands said, “Over the past year, Tom has built a talented leadership team that has worked collaboratively with Burger King Franchisees to develop a multi-year plan to drive the performance of the system. We believe now is the time to make a significant investment to accelerate the work given the quality of the team, focus of the plan, commitment of our Franchisees and the opportunity that clearly exists for our iconic brand to Reclaim the Flame and be the first choice for a high-quality meal, an exceptional experience, and a great value.”

In 2023 and 2024, these investments will have an average annual impact on adjusted EPS of nearly (10)-(12) cents. In 2025 and beyond, these investments are expected to be accretive to the adjusted EPS. Burger King is currently focusing on developing innovative products, to become an industry leader in burgers, breakfast, beverages, snacking and plant-based products.

Zacks Investment Research
Zacks Investment Research


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Price Performance

In the past six months, the company’s shares have gained 8.4% compared with the industry’s increase of 11%. The company has been benefiting from a rise in comparable sales and unit growth (across its segments), growing loyalty and its e-commerce platform. Focus on menu innovation also bodes well. Going forward, the company emphasizes streamlining its products and simplifying its menu boards to boost order accuracy and overall customer satisfaction.

This Zacks Rank #3 (Hold) company continues to focus on improving its level of service through comprehensive training, improved restaurant operations, reimaging efforts and attractive menu options to enhance overall guest satisfaction, and thereby drive comps.

Key Picks

Some better-ranked stocks in the Zacks Retail-Wholesale sector are Tecnoglass Inc. TGLS, Cracker Barrel Old Country Store, Inc. CBRL and Arcos Dorados Holdings Inc. ARCO.

Tecnoglass currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 24.4%, on average. Shares of the company have increased 4.4% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for TGLS’s 2022 sales and earnings per share (EPS) suggests growth of 28.2% and 47.7%, respectively, from the year-ago period’s levels.

Cracker Barrel currently carries a Zacks Rank #2 (Buy). It has a long-term earnings growth of 6.9%. Shares of the company have decreased 19% in the past year.

The Zacks Consensus Estimate for CBR’s 2022 sales and EPS suggests growth of 16.3% and 15.4%, respectively, from the year-ago period’s levels.

Arcos Dorados carries a Zacks Rank #2. It has a long-term earnings growth of 34.4%. Shares of the company have risen 35.6% in the past year.

The Zacks Consensus Estimate for ARCO’s 2022 sales and EPS suggests growth of 27.1% and 104.2%, respectively, from the year-ago period’s levels.


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