Key Takeaways From Restaurant Brands International’s Q2 2017 Earnings
Restaurant Brands International (NYSE: QSR) reported its Q2 2107 earnings on August 2nd 2017 and the company missed revenue consensus estimates primarily due to slowness in its Tim Hortons segment. The highlight of the earnings was a 3.9% comparable sales growth for Burger King, however this was offset by a negative comp growth for both Tim Hortons (-0.8%) and Popeyes Louisiana Kitchen (-2.7%).
Below is a summary of the company’s financial performance for this quarter:
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Due to the weakness in performance of the Tim Hortons segment, additional revenues generated from PLK did not make any significant difference to the company’s finances when compared to the previous quarter in the same year.
Below is a summary of the company’s segment-wise performance for this quarter:
The company attributed the softness in comparable sales growth of the Tim Hortons segment to underperformance of its baked goods and lunch categories in Canada. Some of its limited period offers in this segment were not as effective as last year, however the company believes that it has strategies in place to drive long term growth for Tim Hortons and the second half of the year should see improvements.
RBI’s balance between premium products, value offering, and limited time offerings helped drive growth in the Burger King segment. Its premium product the BAKING KING BURGER and related offerings were well received and promotions around two-cheeseburgers and pancakes below $1 were key drivers in the value segment.
Below is a summary of the company’s expenses for this quarter:
Increase in total operating expenses in Q2 2017 is due to other operating expenses which are primarily relating to foreign exchange fluctuations.
Going Forward:
- RBI finally launched its mobile app for Tim Hortons a few days before the earnings release and this digital initiative should make its services more efficient, driving revenues going forward.
- The company is expanding Tim Hortons in Spain, which is one of the largest café markets in Europe and can prove to be an attractive market for the brand in the long term.
- RBI’s marketing team is working closely with its PLK franchises to test promotions and product launches to drive positive comparable sales for this segment.
For more details see our complete analysis for Restaurant Brands International
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