Here’s What We Are Watching In Restaurant Brands’ Q4 2017 Results

-5.37%
Downside
79.45
Market
75.18
Trefis
QSR: Restaurant Brands logo
QSR
Restaurant Brands

Restaurant Brands International (NYSE: QSR) will announce its Q4 and full year 2017 results on February 12th 2018 and consensus analyst estimates expect a 13% year on year growth in the company’s revenues and a nearly 30% year on year growth in EPS (earnings per share).  In the first three quarters of 2017, comparable sales growth of the company’s Tim Hortons (TH) segment has been disappointing and RBI continues to face issues with the franchisees of Tim Hortons. We will be closely watching the sales of this segment, and the company’s guidance for growth of TH in 2018.

Below is a summary of the company’s quarterly revenue and EPS performance in 2017 and consensus expectations for Q4 2017.

Relevant Articles
  1. Will Q4 Results Help Extend The 20% Gain In Restaurant Brands’ Stock Since Early 2023?
  2. After A 9% Top-Line Growth In Q2 Will Restaurant Brands Stock Deliver Another Strong Quarter?
  3. What To Expect From Restaurant Brands’ Stock Past Q2 Results?
  4. Restaurant Brands Stock to Likely See Little Movement Post Q1
  5. What’s Next For Restaurant Brands Stock?
  6. What To Expect From Restaurant Brands Stock Post Q4?

The charts below show our forecasts for RBI for 2017 and 2018 and you can use our interactive model to modify these charts and analyze the impact of a change in EPS on the company’s price estimate.

Key Trends:

Positive industry environment:  The overall restaurant industry environment has been positive for the quarter ended December 2017. While comparable traffic declined, comparable sales have been positive on the back of higher average checks. Fine dining and upscale casual restaurants are likely to benefit from this trend, however Restaurant Brands International  can benefit from the overall positive trend.

Expansion Of Burger King : RBI is focused on expanding its Burger King chain and is entering into several franchisee agreements to fulfill this goal. Recently the company announced a financial agreement with private equity giant Bridgepoint to expand in the U.K. (Read Here’s How Faster Expansion In The U.K. Can Impact Restaurant Brands International’s Valuation).  This agreement was followed by a master franchise agreement with Nexus Point in Taiwan and another master franchise agreement to expand its presence in the Netherlands. Faster growth of the Burger King Chain can become a key driver of revenues for RBI.

Focus On Tim Hortons Growth: The Tim Hortons segment holds strong growth potential for RBI (Read Can Tim Hortons Be The Key Growth Driver For Restaurant Brands International In The Long Term?) however the company’s issues with the franchisees of TH are not showing any signs of respite.  While franchisees have been blaming RBI management for cost cutting measures, they are now caught in a minimum wage dispute. Resolving the issues with TH franchisees is critical for RBIs future growth.

We will be watching the company’s comparable sales growth in Q4 2017 and looking for the guidance on expansion and other initiatives of 2018 in its earnings call.