Burger King Parent Restaurant Brands Stock Slips On Q3 Earnings Miss; On Track To Deliver 8%+ System-Wide Sales Growth

Restaurant Brands International Inc. QSR shares are trading lower in the premarket session on Tuesday after the company reported its third-quarter results.

Restaurant Brands reported adjusted earnings per share of 93 cents, missing the street view of 95 cents. Quarterly sales of $2.291 billion missed the analyst consensus estimate of $2.307 billion.

The company reported consolidated comparable sales growth of 0.3% and a 3.8% increase in net restaurants compared to the previous year. System-wide sales saw a 3.2% year-over-year rise.

Income from operations was $577 million, slightly down from $582 million in the prior year. However, adjusted operating income reached $652 million, reflecting a 6.1% organic growth when excluding foreign exchange impacts and Restaurant Holdings.

“We have been pleased to see an improvement in consolidated comparable sales in October and remain confident we will achieve our 8% plus Adjusted Operating Income growth target for 2024 and beyond,” said Josh Kobza.

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After acquiring Carrols and PLK China, Restaurant Brands created Restaurant Holdings. This segment includes results from Carrols Burger King and PLK China restaurants.

The company exited the quarter with cash and equivalents worth $1.176 billion. Net inventories as of quarter end totaled $169 million. The company’s long-term debt, net of current portion as of quarter end was $13.571 billion.

Dividend: Restaurant Brands declared a dividend of 58 cents per common share for the fourth quarter of 2024. The dividend will be payable on January 3.

Outlook: For 2024, Restaurant Brands continues to expect adjusted net interest expense to range between $565 million and $575 million. Additionally, consolidated capital expenditures, tenant inducements, and incentives (excluding RH) are expected to total around $300 million.

Restaurant Brands continues to expect its long-term performance targets for 2024 to 2028, including expectations of 3%+ growth in comparable sales, 5%+ growth in net restaurant count, 8%+ growth in system-wide sales, and adjusted operating income growth at least in line with system-wide sales growth.

Price Action: QSR shares are trading lower by 2.87% to $68.03 premarket at last check Tuesday.

Photo by Savvapanf on Shutterstock

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