In the second quarter of 2023, Restaurant Brands International ($QSR) demonstrated year-over-year growth in revenue, although it fell short of Wall Street's expectations. The company reported a revenue increase to $2.08 billion for the three months ending June 30, up from $1.78 billion in the same period last year.
However, this figure was below the average analyst estimate of $2.11 billion, as indicated by Capital IQ. Adjusted earnings per share saw a slight increase to $0.86, compared to $0.85 in the previous year, perfectly aligning with analysts' predictions. CEO Josh Kobza emphasized the company’s approach, stating, "Our priorities and balance of thoughtful investments with cost discipline allow us to navigate short-term consumer pressures and drive sustainable results for our business and our franchisees." This comment underscores Restaurant Brands’ strategic focus on maintaining a steady course amidst fluctuating market conditions. A significant component of the company's recent growth trajectory is attributed to its acquisition of Carrols Restaurant Group, which stands as the largest franchisee of Burger King in the United States.
Restaurant Brands indicated that its quarterly revenue growth was primarily driven by the acquisition of 125 Burger King restaurants from non-Carrols franchisees, which took place in 2023 and the preceding quarter of 2024. Additionally, there were improvements in system-wide sales that contributed to the overall revenue increase. In terms of consolidated comparable sales, there was a 1.9% increase in the second quarter, a notable decline from the 9.6% increase reported in the same period the previous year.
Breaking down the performance by brand reveals a varied landscape: Tim Hortons experienced a strong increase in comparable sales, up 4.6%, whereas Burger King's comparable sales saw a slight dip of 0.1%. This was contrary to the expectations of analysts surveyed by Capital IQ, who had anticipated a 1.5% growth in same-store sales for the fast-food giant. Meanwhile, comparable sales at Firehouse Subs registered a marginal decrease of 0.1%, while Popeyes Louisiana Kitchen reported a growth of 0.5%.
It is important to note that the performance differed by geography; US comparable sales growth for Burger King and Popeyes was reported to be lower on a year-over-year basis, and the trend turned negative for Firehouse Subs. Looking ahead, Restaurant Brands has reaffirmed its financial objectives for the period between 2024 and 2028, maintaining a target of 3% growth in comparable sales.
This steadfast outlook illustrates the company's resolve to foster sustainability in an unpredictable economic landscape, ensuring that both the franchisees and the overarching business model continue to thrive despite varying consumer pressures. Currently, the stock price stands at 69.00, reflecting a change of -1.52, equating to a percentage change of -2.15..