Restaurant Brands International Inc. (QSR) Beats Earnings Expectations

Shares of Toronto, Ontario, Canada, based Restaurant Brands International Inc. (QSR) rose on Tuesday, against the backdrop of a strong day in stocks overall. Restaurant Brands's stock was up 5.65%, rising $1.81 per share, to close at $33.82, on volume of 3,711,530 shares. The parent company of both Tim Hortons and Burger King restaurants exceeded analyst's expectations for its fourth quarter earnings.


Founded in 2014, Restaurant Brands International Inc. ("RBI") is a holding company that owns and operates fast food restaurant chains through its subsidiaries, Tim Hortons Inc. and Burger King Worldwide, Inc. The company has restaurant operations internationally, including Europe, Africa, Latin America and Africa, in addition to the United States and Canada.
Company sales total $23 billion world-wide, from over 19,000 restaurants in approximately 100 countries and US territories. The company's stock trades on the New York Stock Exchange.

On Tuesday, the company announced that its 2015 fourth quarter (ended December 31) earnings came in at $0.35 per share, exceeding analysts forecasts by six cents per share. and nine cents higher than the same quarter a year earlier. Revenues increased at same store sales, with Tim Hortons increasing by 6.3%, while same store sales at the Burger King segment increased by 3.9%. Overall sales increased by 12.4% at Tim Hortons, and by 8.8% at Burger King. The company also added 69 new outlets for the Tim Hortons chain, and 334 new outlets for Burger King during the quarter.

For the full 2015 fiscal year, adjusted diluted earnings per share came in at $1.18, up 20% compared to fiscal 2014 earnings of $0.98 per share. Same store sales revenue increased 5.6% at Tim Hortons and 5.4% at Burger King year-over-year, both in constant currency. Revenues for the fiscal year increased 9.3% at Tim Hortons, which added 155 stores for the year, and 10.3% at Burger King, which added 631 new stores. The company also declared dividends for 2015 that totaled $0.44 per share, an increase of 46.7% over the dividends declared by Burger King for 2014.

The positive earnings results come against the backdrop of the Burger King chain rolling out it's new hot dog product line. Hot dogs have boosted sales at other restaurant chains, including Sonic (SONC) and a number of convenience stores. Burger King's revenue growth was driven by the "2 for $5" platform, Chicken Fries, including Buffalo and Fiery flavors, and the A.1. Halloween Whopper sandwich. Meanwhile Tim Hortons saw the increase attributed to continued strength in beverages as well as new products, such as Nutella pockets and grilled wraps.

"We had a great first year as RBI, finishing the fourth quarter with strong results at both of our iconic brands, Tim Hortons and Burger King," reported Restaurant Brands International Chief Executive Officer Daniel Schwartz. "Successful product launches combined with significant net restaurant growth drove performance this year and our franchisees achieved meaningful levels of profitability. We continue to be excited about future opportunities at Tim Hortons and Burger King and are committed to building long-term sustainable growth for years to come."

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Restaurant Brands International: Misunderstood Growth Strategy Explained
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Published on Feb 17, 2016
By Kevin Mercadante

Copyrighted 2016. Content published with author's permission.

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