Key Takeaways From Restaurant Brands International Q4 2017 Results
Restaurant Brands International (NYSE: QSR) announced its Q4 2017 results on February 12th 2018 beating consensus analyst expectations in EPS (earnings per share) while revenues fell slightly short of consensus estimates.
The most important takeaway from these results was the declining comparable sales growth of the Tim Hortons segment. This segment reported a negative 0.1% comp growth for the year 2017 compared to the 2.5% figure for the previous year. For Q4 2017, comparable sales for TH were at 0.1% continuing the slow growth trend for the year. The company has attributed this decline to macro factors in Western Canada and expects things to improve in the next year. Initiatives such as the mobile ordering system and espresso-based beverage platform are likely to drive growth for TH going forward.
The below charts summarize RBI’s performance in 2017 and provide our expectations for 2018. You can access our interactive model here to modify our assumptions and create your own scenarios.
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Acceleration of net restaurant growth at Burger King drove system-wide sales growth to 10.1% in 2017. Comparable sales growth of this segment was 3.1% for 2017. Value promotions and innovations around BAKING KING and the Crispy Chicken Sandwich platforms drove growth for this segment. Going forward the company will continue to focus on global positioning of the Burger King brand.
The Popeyes segment reported negative global comparable sales growth of 1.5% for the year 2017 due to competitive pressures, however the company is confident about the growth prospects of this segment. Competitive activity in the U.S. was focused on value and discount and RBI needs to still work more on this segment to build a competitive edge.
RBI is focused on growing its net restaurant count for all three segments and this momentum is likely to continue going forward. The new U.S. tax laws are likely to reduce the company’s effective tax rate to the low 20% range.
We will be updating our model based on the above results, which can lead to a change in our price estimate for the company.
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