Restaurant Brands (QSR) Q4 Earnings Top Estimates, Rise Y/Y

This story originally appeared on Zacks

Restaurant Brands International, Inc. QSR reported impressive fourth-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Moreover, the metrics increased on a year-over-year basis. The quarterly results benefited from a rise in comparable sales and unit growth (across its segments) as well as from growing loyalty and e-commerce platform. Following the announcement, shares of the company moved up 3.6% during the trading hours on Feb 15.

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Earnings & Revenue Discussion

During fourth-quarter 2021, the company reported adjusted earnings per share (EPS) of 74 cents, beating the Zacks Consensus Estimate of 70 cents by 5.7%. The bottom line increased 39.6% year over year from an adjusted EPS of 53 cents reported in the prior-year quarter.
Quarterly net revenues of $ 1,546 million surpassed the consensus mark of $1,496 million. The top line increased 13.8% on a year-over-year basis, owing to higher system-wide sales in all of its brands and performance growth across the Tim Hortons and Burger King segments.

 

Segmental Revenues

Restaurant Brands operates through three segments — Tim Hortons, Burger King and Popeye’s Louisiana Kitchen.
During fourth-quarter 2021, revenues in Tim Hortons totaled $916 million, up 17.1% from the prior-year quarter’s levels. System-wide sales increased 14% year over year against a fall of 12.9% reported in the prior-year quarter. Comps in the segment rose 10.3% year over year versus an 11% decline in the year-ago quarter. In the quarter under review, net restaurant growth was recorded at 6.9% compared with 0.3% in the prior-year quarter.
Burger King’s revenues totaled $480 million in fourth-quarter 2021, indicating growth of 10.6% from the prior-year quarter’s levels. System-wide sales growth in the segment increased 15.4% year over year against an 8.1% decline in the prior-year quarter. Comps rose 11.3% year over year against a 7.9% fall reported in the prior-year quarter. In the fourth quarter, net restaurant growth was 3.3% against a 1.1% decline reported in the prior-year quarter.
Popeye’s Louisiana Kitchen generated revenues of $145 million in fourth-quarter 2021, up 2.1% from the prior-year quarter’s levels. System-wide sales growth came in at 7.2% year over year against a decline of 0.9% recorded in the prior-year quarter. Net restaurant growth came in at 7.4% compared with 4.1% growth in the prior-year quarter. Comps in the segment dropped 0.4% compared with a fall of 5.8% reported in the prior-year quarter.

Operating Performance

In the quarter under review, the company’s adjusted EBITDA increased 16.6% year over year to $584 million. On an organic and reported basis, the upside was driven by an increase in Tim Hortons, Burger King and Popeye’s adjusted EBITDA.
Segment-wise, Tim Horton’s adjusted EBITDA increased 13.1% from the year-ago quarter’s figure. Burger King’s adjusted EBITDA rose 22% year over year. Moreover, Popeye’s adjusted EBITDA moved up 5.6% from the year-ago quarter’s levels.

Cash and Capital

Restaurant Brands ended the fourth quarter with a cash and cash equivalent balance of $1,087 million compared with $1,560 million reported in the prior-year period. As of Dec 31, 2021, long-term debt (net of current portion) stood at $12.9 billion compared with $12.4 billion as of Dec 31, 2020.
The company’s board of directors announced a dividend payout of 54 cents per common share and partnership exchangeable unit of Restaurant Brands International Limited Partnership for first-quarter 2022. The dividend is payable on Apr 6, 2022, to shareholders of record at the close of business as of Mar 23, 2022.

2021 Highlights

Total revenues in 2021 amounted to $5,739 million compared with $4,968 million in 2020.

Adjusted EBITDA in 2021 came in at $2,248 million compared with $1,864 million in 2020.
In 2021, diluted earnings per share (EPS) came in at $2.82 per share compared with $2.03 reported in the previous year.

Zacks Rank

Restaurant Brands currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Zacks Retail-Wholesale sector include MarineMax, Inc. HZO, Arcos Dorados Holdings Inc. ARCO and Tapestry, Inc. TPR. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MarineMax sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 55.8%, on average. Shares of the company have increased 7.1% in the past year.
The Zacks Consensus Estimate for MarineMax’s 2022 sales and EPS suggests growth of 13.9% and 16.2%, respectively, from the year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 24.7%. Shares of the company have increased 33.2% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 9.8% and 157.7%, respectively, from the year-ago period’s levels.
Tapestry carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 28.2%, on average. Shares of the company have increased 4.3% in the past year.
The Zacks Consensus Estimate for Tapestry’s 2022 sales and EPS suggests growth of 17.6% and 22.9%, respectively, from the year-ago period’s levels.

5 Stocks Set to Double

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