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Restaurant Brands (QSR) Q2 Earnings Beat Estimates, Up Y/Y

Zacks Equity Research
Updated

Restaurant Brands International, Inc. QSR reported better-than-expected second-quarter 2019 results. Also, its top and bottom lines gained on a year-over-year basis.

The company’s adjusted earnings of 71 cents per share surpassed the Zacks Consensus Estimate of 67 cents andgrew7.6% from the year-ago quarter number. This uptick can be primarily attributed to consistent improvement in Restaurant Brands' top line.

Total revenues were $1,400 million, which outpaced the consensus mark of $1,385 million. The metric also improved 4.2% from the year-ago quarter figure, courtesy of increased system-wide sales across the company’s brands.

Segmental Revenues

Restaurant Brands operates through three segments — Tim Hortons, Burger King and Popeye’s Louisiana Kitchen.

Revenues at Tim Hortons totaled $842 million compared with $823 million in the prior-year quarter. Also, system-wide sales rose 1.6% on net restaurant growth. Meanwhile, comps at this segment improved0.5% compared with flat comps in the prior-year quarter.

Burger King’s revenues grew from $418 million in second-quarter 2018 to $447 million in the quarter under review, mainly driven by increased franchise and property revenues. Also, system-wide sales rose 9.8%, wider than 8.4% growth registered in the year-ago comparable period. System-wide sales growth can be attributed to net restaurant growth of 5.8% and positive comps growth. Comps grew 3.6% compared with 1.8% rise in the prior-year quarter.

Popeye’s Louisiana Kitchen, which was acquired on Mar 27, 2017, reported revenues of $111 million compared with $102 million in the year-ago quarter.System-wide sales rose 8.8%, owing to net restaurant growth of 6.1% and 3% rise in comps. Notably, system-wide sales growth compared unfavorably with the prior-year quarter’s 10.7% increase. Comparable sales grew 3%, comparing favorably with year-ago quarter’s increase of 2.9%.

Restaurant Brands International Inc. Price, Consensus and EPS Surprise

Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands International Inc. Price, Consensus and EPS Surprise

Operating Performance

In the quarter under review, the company’s adjusted EBITDA rose 6.3% on an organic basis, driven by system-wide sales growth. Segment-wise, Tim Horton’s EBITDA rose 3.5%. Burger King’s EBITDA grew 10% year over year. Popeye’s EBITDA was up 4.6%.

Cash and Capital

Restaurant Brands exited the second quarter with cash and cash equivalent balance of $1,028 million. As of Jun 30, 2019, total debt was $12.3 billion. The company’s board of directors declared a dividend payout of 50 cents per share for the third quarter of 2019, payable Oct 3 to its shareholders of record at the close of business as of Sep 17.

Zacks Rank & Peer Releases

Restaurant Brands currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Darden DRI reported fourth-quarter fiscal 2019 results, wherein earnings surpassed the Zacks Consensus Estimate, whereas revenues lagged the same. Adjusted earnings of $1.76 per share beat the Zacks Consensus Estimate of $1.73. Moreover, the bottom line rose26.6% year over year on higher revenues.

Domino’s DPZ reported mixed second-quarter 2019 financial numbers, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings were $2.19 per share, which outpaced the Zacks Consensus Estimate of $2.00. The metric also grew 19% on a year-over-year basis. The bottom-line improvement was driven by higher net income and lower diluted share count as a result of share repurchases.

Chipotle CMG reported better-than-expected results in the second quarter of 2019. Its adjusted earnings of $3.99 per share surpassed the Zacks Consensus Estimate of $3.69 by 8.1%. Further, the bottom line grew 39% from the year-ago quarter, backed by an increase in revenues and strong operating margins.

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Click to get this free report Darden Restaurants, Inc. (DRI) : Free Stock Analysis Report Restaurant Brands International Inc. (QSR) : Free Stock Analysis Report Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report Domino's Pizza Inc (DPZ) : Free Stock Analysis Report To read this article on Zacks.com click here.