Restaurant Brands’ Q1 revenue declines 3% as sales plunge at Tim Hortons

In its report on Friday, Restaurant Brands International Inc. (TSE: QSR) announced a massive 26.2% increase in same-store sales at its world-popular chain of fast-food, Popeyes. The company attributed upbeat sales to its chicken sandwiches that it said were greatly in demand in the recent quarter. Popeye’s sales printed higher than Wall Street estimates in the first quarter.

Restaurant Brands’ revenue declines 3% in Q1

Popeye’s strong sales, however, failed to sufficiently help the company’s total revenue that came in 3% lower at £980 million in the first quarter as compared to the same quarter last year. The company attributed this decline to a 10.3% decline in comparable sales at Tim Hortons as the Coronavirus pandemic restricted people to their homes and slashed demand for breakfast and coffee.

In a bid to promote curbside pickup and takeaways, however, Tim Hortons also introduced a mobile application at a few of its Canadian restaurants to help derive sales amidst the outbreak.

At its third popular chain, Burger King, Restaurant Brands also announced a 3.7% decline in same-store sales in Q1.

According to Refinitiv, analysts had forecast a lower 17.47% increase in comparable sales at Popeyes and a 9.24% decrease in Tim Hortons’ same-store sales in the first quarter. Restaurant Brands also posted £115 million in net income attributable to shareholders or 38 pence of earnings per share. In the same quarter last year, its net income was recorded at £108 million or 42 pence of earnings per share.

Restaurant Brands expects a stronger financial hit in Q2

The ongoing health crisis has pushed the company’s countrywide restaurants into a temporary closure to minimize the fast transmission of the flu-like virus. The Canadian multinational fast-food holding company further added that it is uncertain when its restaurants will resume operations and that the COVID-19 driven hit to its financial performance in the second quarter will be more pronounced.

The Coronavirus has so far infected roughly 1.1 million people in the United States and has caused more than 63,800 deaths.

At £38.60 per share, Restaurant Brands is currently around 20% down year to date in the stock market. The stock dropped to as low as £23 per share in March. Its performance in 2019 was reported fairly upbeat with an annual gain of a little over 15%.

At the time of writing, Restaurant Brands is valued at £17.92 billion and has a price to earnings ratio of 35.69.