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Restaurant Brands (QSR) to Post Q1 Earnings: What's in Store?

Zacks Equity Research

Restaurant Brands International Inc. QSR is scheduled to report first-quarter 2020 results on May 1, before the opening bell. In the last-reported quarter, the company delivered a positive earnings surprise of 2.7%. Further, it has a trailing four-quarter beat of 0.5%, on average.

How Are Estimates Placed?

The Zacks Consensus Estimate for first-quarter earnings is pegged at 49 cents per share, indicating a decline from earnings of 55 cents recorded in the year-ago quarter. For revenues, the consensus mark is pegged at $1,228 million, suggesting a decline of 3% from the year-ago figure.

Let's take a look at how things have shaped up in the quarter.

Restaurant Brands International Inc. Price and EPS Surprise


Restaurant Brands International Inc. Price and EPS Surprise

Restaurant Brands International Inc. price-eps-surprise | Restaurant Brands International Inc. Quote

Factors at Play

The coronavirus pandemic is expected to have materially affected Restaurant Brands’ financial performance in first-quarter 2020. With majority of the outlets temporarily closed, the company is operating only through pickup and delivery services. Due to this, traffic has declined considerably compared to pre-outbreak levels. Moreover, comps at Burger King, Popeyes and Tim Hortons businesses are also likely to have declined in the to-be-reported quarter.

Nonetheless, initiatives like digital enhancement, menu innovation and product expansion are likely to have boosted the top line. Also, its master franchise joint venture partnerships in Mexico and Spain are likely to have aided the top line in the first quarter.

What Our Model Says

Our proven model does not predict an earnings beat for Restaurant Brands this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. But that's not the case here.

Earnings ESP: Restaurant Brands has an Earnings ESP of -0.79%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Retail-Wholesale sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:

Papa John's International, Inc. PZZA has a Zacks Rank #3 and an Earnings ESP of +5.06%.

Potbelly Corporation PBPB has a Zacks Rank #3 and an Earnings ESP of +16.18%.

Builders FirstSource, Inc. BLDR has a Zacks Rank #3 and an Earnings ESP of +9.16%.

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