Restaurant Brands Posts Better-than-Expected Q2 Results

Restaurant Brands International (QSR) reported a strong boost in revenues and profits in its second quarter, as consumers returned to restaurants. The company is the owner of three quick-service restaurant brands: Burger King, Tim Hortons, and Popeyes.

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Results showed that revenue came in at $1.44 billion for the quarter ended June 30, an increase of 37% from $1.05 billion in the prior-year quarter. Same-store sales at Tim Hortons, Restaurant Brands’ largest revenue generator, jumped 27.6% in the second quarter, while those at Burger King rose 18.2%.

Additionally, net income attributable to common shareholders was $390 million ($0.84 per share) in Q2 2021, compared to a profit of $163 million ($0.35 per share) in Q2 2020. Meanwhile, adjusted EPS was $0.77, up from $0.33 a year ago.

Analysts on average expected adjusted EPS of $0.61 on $1.36 billion in revenue, according to financial data firm Refinitiv.

Referring to the results, restaurant Brands’ CEO José E. Cil said, “We are encouraged by the momentum across our business – including sales increases driven by quality menu items, rapid adoption of our digital channels by our guests and an acceleration in new restaurant openings around the world by our franchisees who believe strongly in our brands and business model.”

On another positive note, unit growth returned to pre-pandemic levels, with 378 new restaurants opened in the first half of the year. (See Restaurant Brands International stock charts on TipRanks)

On Thursday, Stephens analyst James Rutherford reiterated a Buy rating on QSR and a price target of $80.00 (C$99.77). This implies 17.3% upside potential.

Rutherford stated that as expectations weren’t high for QSR, he believes the results are likely to be viewed favorably by the market.

The rest of the Street is cautiously optimistic about QSR, with a Moderate Buy consensus rating based on 11 Buys, 4 Holds, and 1 Sell. The Restaurant Brands International price target of C$93.08 implies 9.35% upside potential to current levels.

TipRanks’ Smart Score

Restaurant Brands International scores a “Perfect 10” on the TipRanks Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.