Restaurant Brands's (NYSE:QSR) Q1 Sales Beat Estimates

Max Juang /
2024/04/30 6:35 am EDT

Fast-food company Restaurant Brands International (NYSE:QSR) reported Q1 CY2024 results topping analysts' expectations, with revenue up 9.4% year on year to $1.74 billion. It made a non-GAAP profit of $0.73 per share, down from its profit of $0.75 per share in the same quarter last year.

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Restaurant Brands (QSR) Q1 CY2024 Highlights:

  • Revenue: $1.74 billion vs analyst estimates of $1.70 billion (2.2% beat)
  • EPS (non-GAAP): $0.73 vs analyst estimates of $0.72 (1.3% beat)
  • Gross Margin (GAAP): 40%, down from 40.6% in the same quarter last year
  • Free Cash Flow of $122 million, down 65.7% from the previous quarter
  • Same-Store Sales were up 4.6% year on year
  • Store Locations: 31,113 at quarter end, increasing by 1,157 over the last 12 months
  • Market Capitalization: $23.36 billion

Formed through a strategic merger, Restaurant Brands International (NYSE:QSR) is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.

Traditional Fast Food

Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.

Sales Growth

Restaurant Brands is one of the most widely recognized restaurant chains in the world and benefits from brand equity, giving it customer loyalty and more influence over purchasing decisions.

As you can see below, the company's annualized revenue growth rate of 6% over the last five years was weak , but to its credit, it opened new restaurants and grew sales at existing, established dining locations.

Restaurant Brands Total Revenue

This quarter, Restaurant Brands reported solid year-on-year revenue growth of 9.4%, and its $1.74 billion in revenue outperformed Wall Street's estimates by 2.2%. Looking ahead, Wall Street expects sales to grow 5% over the next 12 months, a deceleration from this quarter.

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Same-Store Sales

Same-store sales growth is an important metric that tracks organic growth and demand for a restaurant's established locations.

Restaurant Brands's demand within its existing restaurants has generally risen over the last two years but lagged behind the broader sector. On average, the company's same-store sales have grown by 7.9% year on year. With positive same-store sales growth amid an increasing number of restaurants, Restaurant Brands is reaching more diners and growing sales.

Restaurant Brands Year On Year Same Store Sales Growth

In the latest quarter, Restaurant Brands's same-store sales rose 4.6% year on year. By the company's standards, this growth was a meaningful deceleration from the 10.3% year-on-year increase it posted 12 months ago. We'll be watching Restaurant Brands closely to see if it can reaccelerate growth.

Key Takeaways from Restaurant Brands's Q1 Results

We were excited that Restaurant Brands exceeded expectations on the revenue and EPS lines. Zooming out, we think this was a solid quarter. The stock is flat after reporting and currently trades at $74.3 per share.

Restaurant Brands may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.