Shares of Restaurant Brands International (QSR) slumped in pre-market trading after the company’s Q3 results fell short of estimates. The company behind brands like Burger King and Tim Horton’s saw its Q3 adjusted earnings increase by 4.6% year-over-year on an organic basis to $0.93 per share, which fell slightly short of consensus estimates of $0.94 per share.
QSR’s Tim Horton’s Revenues Inch Higher in Q3
Furthermore, the company’s revenues increased by 24.7% year-over-year to $2.3 billion in the third quarter. In comparison, analysts were expecting revenues of $2.33 billion. In addition, QSR’s comparable sales inched higher by 0.3% in the third quarter.
Looking at QSR’s revenue breakdown in Q3, Tim Horton’s brand remained the top performer. This coffee shop chain comprised more than 45% of its total Q3 revenues and clocked revenues of $1.04 billion, a rise of 0.7% year-over-year.
QSR Reiterates Outlook
Looking ahead, the company expects capex of around $300 million in FY24, with adjusted net interest expense likely to be between $565 million and $575 million. Over the long term, between 2024 and 2028, the company expects to achieve an average growth of 3% in comparable sales and an 8% rise in system-wide sales growth. Additionally, during this same period, QSR expects to achieve an average adjusted operating margin “at least as fast as system-wide sales growth.”
Is QSR Stock a Good Buy?
Analysts remain cautiously optimistic about QSR stock, with a Moderate Buy consensus rating based on 11 Buys, six Holds, and one Sell. Over the past year, QSR has increased by more than 5%, and the average QSR price target of $84.07 implies an upside potential of 20% from current levels. These analyst ratings are likely to change following QSR’s results today.
