3 key takeaways from Restaurant Brands’ Q1 earnings report

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in his free… read more.
on Apr 30, 2021
  • Restaurant Brands reports better than expected earnings and revenue in Q1.
  • Comp sales jumped 0.7% at Burger King & 1.5% at Popeyes in the first quarter.
  • Restaurant Brands' shares were up roughly 3% in premarket trading on Friday.

Restaurant Brands International Inc. (TSE: QSR) published its earnings report for the fiscal first quarter on Friday that topped analysts’ estimates for earnings and revenue, despite the ongoing COVID-19 restrictions.

1. Financial performance

Restaurant Brands said that its net income in the first quarter came in at £129.07 million that translates to 41.82 pence per share. In the comparable quarter of last year, its net income was capped at a lower £103.83 million, or 34.61 pence per share.

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On an adjusted basis, the fast-food company earned 39.66 pence per share in Q1. RBI generated £910 million of revenue in the recent quarter versus the year-ago figure of £890 million. According to FactSet, experts had forecast the company to post £900 million of revenue in the first quarter and 36.05 pence of adjusted EPS.

2. Comparable sales from individual businesses

According to Restaurant Brands International, its comparable sales in Q1 were up 0.7% at Burger King and 1.5% at Popeyes. Tim Hortons, on the other hand, saw a 2.3% decline in sales on a year over year basis.

As of March 2021, 95% of RBI’s restaurants in the Asia Pacific and North America are now open for the public. 92% are open in Europe, Middle East and Africa, while in Latin America, 84% of its restaurants have resumed operations.

In separate news from the U.S., Western Digital also published its quarterly update on Thursday.

3. Chief executive Jose Cil’s remarks

CEO Jose Cil commented on the financial update on Friday and said:

“The results of long-term investments we are making in digital initiatives, such as loyalty programs and our branded apps, were best demonstrated in Canada during Q1 where digital channels drove nearly one-third of all sales for Tim Hortons in the quarter; almost twice the levels for the same period last year and the largest quarter yet for digital sales for any of our brands in Canada and the U.S.  Our digital channels will allow us to drive incrementality for our restaurants as well as a more personalized and valuable experience for our guests.”

Impact on the share price

Restaurant Brands shares that you can conveniently trade online via a range of user-friendly apps jumped roughly 3% in premarket trading on Friday but lost almost half of the intraday gain on market open. The stock is now exchanging hands at £49.50 per share versus £42.82 per share at the start of the year. At the time of writing, it is valued at £23.10 billion and has a price to earnings ratio of 43.36.

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