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Restaurant Brands (QSR) Reports Preliminary Q3 Comps Data

Zacks Equity Research
·3-min read

Restaurant Brands International Inc. QSR recently provided preliminary comparable restaurant sales for the third quarter of 2020, ended Sep 30.

Preliminary Comparable Sales

During the third quarter of 2020, comparable sales at Tim Hortons – Canada, Tim Hortons – Rest of World and Tim Hortons – Global fell 13.7%, 3.6% and 12.5% compared with a fall of 1.2%, 2.7% and 1.4% in the prior-year quarter, respectively.

During the third quarter, comparable sales at Burger King – U.S., Burger King – Rest of World and Burger King – Global declined 3.2%, 10.3% and 7% against 5%, 4.7% and 4.8% growth reported in the prior-year quarter, respectively.

Meanwhile, in the Popeye’s Louisiana Kitchen segment, comparable sales in the U.S. and global markets grew 19.7% and 17.4% in the third quarter compared with growth of 10.2% and 9.7% in the year-ago quarter, respectively. However, comparable sales for Popeye’s Louisiana Kitchen – Rest of World declined 0.3% against 6.3% growth reported in the previous-year quarter.

Overall, system-wide sales growth for the third quarter of 2020 declined 5.4% against 8.9% growth in the prior-year quarter.

Other Updates

Management expects revenues for the third quarter between $1,320 million and $1,340 million, while adjusted EBITDA is projected between $555 and $565 million for the quarter.

Moreover, the company updated that 96% of its system-wide restaurants remained open, as of Sep 30, 2020.

Price Performance

Coming to price performance, shares of Restaurant Brands have declined 6.8% so far this year against the industry's 8.6% growth. Notably, the company has been negatively impacted by the coronavirus outbreak. Also, dismal performance by the Tim Hortons and Burger King segments added to the downside. However, solid expansion efforts, various sales-building strategies and focus on franchise business model are likely to benefit the company. Also, earnings estimates for 2021 have moved up over the past 30 days, depicting analyst optimism over the stock’s growth potential.

Zacks Rank & Key Picks

Restaurant Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Better-ranked stocks worth considering in the same space include Bloomin' Brands, Inc. BLMN, Brinker International, Inc. EAT and Del Taco Restaurants, Inc. TACO, each sporting a Zacks Rank #1.

Bloomin' Brands has a three-five-year earnings per share growth rate of 2.9%.

Del Taco’s 2021 earnings are expected to increase 51.9%.

Brinker has a trailing four-quarter earnings surprise of 52.7%, on average.

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