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Mrinalini Chaudhuri
Mrinalini Chaudhuri
Articles (486) 

Restaurant Brands Rallies

Company posted strong 4th quarter and beats on revenue

February 17, 2017 | About:

Restaurant Brands International Inc. (NYSE:QSR), one of the world's largest quick-service restaurant companies, reported strong fourth-quarter and full-year results. It owns two of the world's most iconic brands, Tim Hortons and Burger King.

The fourth quarter was marked by strong financial results. The flagship brands Tim Hortons and Burger King had major roles in this success. These brands have been there for more than 50 years.

Tim Hortons' comparable sales also increased during the quarter. Total revenues and income available to common shareholders increased during the quarter. Tim Hortons' comparable sales increased by 0.2% and Burger King's comparable sales increased by 2.8% in constant currency in the fourth quarter. Systemwide sales increased by 2.4% for Tim Hortons and 8.5% for Burger King in constant currency during the current quarter.

Strong fourth quarter

Total revenues during the quarter were $1.11 billion (which was $1.06 billion in the prior-year quarter).

Net income attributable to common shareholders during the quarter was $118.4 million (which was $51.7 million in the prior-year quarter).

Diluted EPS during the quarter was 50 cents (which was 25 cents in the prior-year quarter).

Adjusted EBITDA during the quarter was $512.4 million (which marked an increase of 16.4% on an organic basis from the prior-year quarter).

Adjusted diluted EPS during the quarter was 44 cents (which was an increase of 37.5% from the prior-year quarter).

Full-year results

Total revenues during the year were $4.15 billion (which was $4.05 billion in the prior-year period).

Net income attributable to common shareholders during the year was $345.6 million (which was $103.9 million in the prior-year period).

Diluted EPS during the year was $1.45 (which was 50 cents in the prior-year period).

Adjusted EBITDA during the year was $1.89 billion (which marked an increase of 16.4% on an organic basis from the prior-year period).

Adjusted diluted EPS during the year was $1.58 (which marked an increase of 45.0% from the prior-year period).

Tim Hortons

  • Comparable sales increased by 2.5% in constant currency.
  • Restaurant count increased by 4.5%.

Burger King

  • Comparable sales increased by 2.3% in constant currency.
  • Restaurant count increased by 4.9%.

Focus

  • Innovate and evolve strong brands.
  • Cost management.
  • Guest satisfaction.
  • Value creation for all the stakeholders.
  • Accelerate global restaurant growth.

Conclusion

It has over 20,000 restaurants in more than 100 countries and U.S. territories. The company strives to grow the same-store sales of its existing restaurants and is focusing on menu innovation. It is making investments for compelling marketing. The company is known for paying safe dividends. The Burger King brand contributed to the fourth quarter success by offering discounts on nuggets and engaging in promotions like nuggets, drink and fries for $4.

The company is focusing on opening Tim Hortons stores in Latin America. For the brand development, the company has announced the establishment of a master franchise joint venture with a group of investors in Mexico. Mexico is a place where there is a strong coffee market, which naturally holds good prospects for this brand. As of Sept. 30, 2016, Tim Hortons had around 4,400 systemwide restaurants sprawled over Canada, the U.S. and the Middle East.

After the recent quarter release, the company is aiming to deliver a healthy menu to its investors and is poised for a better future. 2016 was a solid year for this company that resulted in accelerated restaurant development. It is committed to a long-term growth. As per the National Restaurant Association the restaurant industry will remain the nation’s second-largest private sector employer with a workforce of 14.4 million and will create 1.7 million new restaurant jobs by 2026. The company has lots of opportunities in the future. Adding this company will reap shareholder returns.

Disclosure: I do not hold a position in the company.

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