Restaurant Brands (QSR) Q4 Earnings & Revenues Top Estimates
Restaurant Brands International, Inc. QSR reported fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
Following the results, the company’s shares dropped 4.5% during trading hours on Feb 13. Negative investor sentiments were witnessed as management cited concerns about an uncertain operating environment because of inflationary pressures, foreign exchange volatility, rising interest rates and general softening in the consumer environment (impacted by the conflict in the Middle East).
Earnings & Revenue Discussion
In the quarter under review, QSR reported adjusted earnings per share (EPS) of 75 cents, surpassing the Zacks Consensus Estimate of 73 cents. The bottom line increased 4.5% from 72 cents reported in the prior-year quarter.
Quarterly net revenues of $1.82 billion beat the consensus mark of $1.8 billion. The top line increased 7.8% on a year-over-year basis. The upside was driven by strong system-wide sales growth and the passing on of elevated commodity prices to franchisees. On a reported basis, this was partially offset by unfavorable FX movements.
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands International Inc. price-consensus-eps-surprise-chart | Restaurant Brands International Inc. Quote
During the quarter, global system-wide sales rose 9.6% year over year.
Segmental Revenues
Restaurant Brands operates through five segments — Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), Firehouse Subs (FHS) and International (INTL).
In the fourth quarter, revenues from Tim Hortons totaled $1.02 billion, up 3.2% from the prior-year quarter’s levels. System-wide sales rose 9% year over year compared with 10.5% growth reported in the prior-year quarter. Comps rose 8.4% year over year compared with 10.1% a year ago. Net restaurant growth was 0.1% year over year against a 1.1% fall reported in the prior-year quarter.
Burger King’s revenues amounted to $345 million, indicating 11% growth from the year-ago quarter’s levels. System-wide sales rose 4.9% year over year compared with 5.5% growth reported in the prior-year quarter. Comps climbed 6.3% year over year compared with 5% growth in the year-earlier quarter. Net restaurant growth was down 3.3% year over year compared with a 0.6% fall reported in the prior-year quarter.
Popeyes Louisiana Kitchen generated revenues of $182 million, up 12.4% from the prior-year levels. System-wide sales growth came in at 11.2% year over year compared with 6.5% growth reported in the prior-year quarter. Comps rose 5.5% year over year compared with 1.7% growth reported in the prior-year quarter. Net restaurant growth was 4.9% year over year compared with 6.7% growth a year ago.
Firehouse Subs recorded revenues of $51 million, up 41.9% from the year-earlier levels. System-wide sales growth was 7.8% compared with 6.9% reported in the previous quarter. Net restaurant growth was 3% compared with 2.4% in the prior year quarter. Comps rose 3.5% year over year.
Fourth-quarter revenues from the International segment came in at $224 million, up 15.8% year over year. System-wide sales growth came in at 12.8% year over year compared with 18.5% growth reported in the prior-year quarter. Comps grew 4.6% year over year compared with 10.5% growth reported in the prior-year quarter. Net restaurant growth was 8.9% year over year compared with a 9.1% increase a year ago.
Operating Performance
During the quarter, adjusted EBITDA amounted to $603 million compared with $588 million reported in the prior-year quarter. On a reported basis, the upside was driven by increases in TH, FHS, PLK and INTL Adjusted EBITDA. However, this was partially offset by a fall in BK Adjusted EBITDA.
Segment-wise, Tim Horton’s adjusted EBITDA increased 3.2% year over year to $271 million. Burger King’s adjusted EBITDA fell 17.8% year over year to $87 million. Popeye’s adjusted EBITDA came in at $66 million, up 10.2% year over year. During the quarter, adjusted EBITDA from the Firehouse Subs came in at $15 million, up 23.2% year over year. Adjusted EBITDA in the International segment came in at $164 million, up 11.5% year over year.
Cash and Capital
Restaurant Brands ended fourth-quarter 2023 with a cash and cash equivalent balance of $1.1 billion compared with $1.2 million at 2022 end. As of Dec 31, 2023, long-term debt (net of current portion) was $12.9 billion compared with $12.8 billion as of 2022-end.
2023 Highlights
Total revenues in 2023 amounted to $7 billion compared with $6.5 billion reported in 2022.
Adjusted EBITDA in 2023 came in at $2.6 billion compared with $2.4 billion in 2022.
In 2023, adjusted diluted EPS came in at $3.24 compared with $3.14 reported in the previous year.
Zacks Rank
Restaurant Brands currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
McDonald's Corporation MCD reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% from the prior-year quarter’s figure. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns and continued digital and delivery growth.
Yum China Holdings, Inc. YUMC reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis. Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. EAT reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported an adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.
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