Restaurant Brands International, Inc. QSR reported fourth-quarter 2024 results with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
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QSR’s Q4 Earnings & Revenue Discussion
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands International Inc. Price, Consensus and EPS Surprise
Restaurant Brands International Inc. price-consensus-eps-surprise-chart | Restaurant Brands International Inc. Quote
QSR reported adjusted earnings per share (EPS) of 81 cents, beating the Zacks Consensus Estimate of 79 cents. Organically, the bottom line grew 11% year over year.
Quarterly net revenues of $2.29 billion beat the consensus mark by 0.1%. The top line increased 26.2% on a year-over-year basis.
During the quarter, consolidated comparable sales (comps) increased 2.5% year over year, and net restaurants grew 3.4% year over year. Global system-wide sales rose 5.6% year over year.
QSR Segmental Details
Restaurant Brands operates through six segments — Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), Firehouse Subs (FHS), International (INTL) and Restaurant Holdings (RH).
TH business reported revenues of $1.03 billion, up 0.8% from the prior-year quarter’s levels. Organically, revenues were up 3.2% year over year. The upside was backed by an increase in system-wide sales and higher Supply Chain Sales to franchisees. System-wide sales rose 3.2% year over year compared with the 9% growth reported in the prior-year quarter. Comps rose 2.2% year over year compared with an 8.4% rise reported in the year-ago period.
BK’s revenues amounted to $374 million, up 8.7% from the year-ago period (8.8% organically). The increase can be attributed to the net impact of acquiring non-Carrols restaurants from franchisees. Additionally, higher advertising revenues and other services contributed to the upside. System-wide sales grew 0.5% year over year compared with the 4.9% growth reported in the prior-year quarter. Comps rose 1.1% year over year compared with 6.3% growth in the year-earlier quarter. Net restaurant growth was down 0.9% year over year compared with a 3.3% decline reported in the prior-year quarter.
PLK generated revenues of $201 million, up 10.6% year over year (10.7% organically). System-wide sales grew 2.8% year over year compared with the 11.2% rise reported in the prior-year quarter. Comps fell 0.2% year over year against the 5.5% growth reported in the prior-year quarter. Net restaurant growth was 3.7% year over year compared with 4.9% growth a year ago.
FHS’ revenues totaled $58 million, up 14.2% from the year-ago levels (14.3% organically). System-wide sales increased 5.4% year over year compared with an 8% rise reported in the prior-year quarter. Net restaurant growth was 6.3% compared with 3% reported in the prior-year quarter. Comps inched up 0.3% year over year compared with 3.5% growth reported in the prior-year quarter.
INTL segment revenues came in at $237 million, up 5.8% year over year (9.8% organically). The upside was driven by higher royalties from Burger King and Popeyes franchisees due to increased system-wide sales. System-wide sales growth was 11.2% year over year compared with the 12.8% growth reported in the prior-year quarter. Comps rose 4.7% year over year compared with the 4.6% growth reported in the prior-year quarter. Net restaurant growth was 6.1% year over year compared with an 8.9% increase a year ago.
During the quarter, RH segment revenues came in at $445 million.
Operating Performance
During the quarter, adjusted operating income rose 13.5% year over year to $578 million. Our projection for the metric was $554.5 million.
Adjusted EBITDA of $688 million was up 14.1% from $603 million reported in the prior-year quarter. Our estimate for the metric was $661.8 million.
Cash and Capital
Restaurant Brands ended the fourth quarter with a cash and cash equivalent balance of $1.33 billion compared with $1.14 billion as of Dec. 31, 2023. As of Dec. 31, 2024, long-term debt (net of current portion) was $13.5 billion compared with $12.9 billion as of Dec. 31, 2023.
Net cash provided by operating activities (for the 12 months ended Dec. 31) was $1.5 billion compared with $1.32 billion in the year-ago period. Adjusted EBITDA net leverage ratio stood at 4.6 compared with 4.8 in the prior year period.
QSR’s board of directors announced a dividend payout of 62 cents per common share and a partnership exchangeable unit of Restaurant Brands International Limited Partnership in the first quarter of 2025. The dividend is payable on April 4, 2025, to its shareholders of record at the close of business as of March 21, 2025.
QSR 2024 Highlights
Total revenues in 2024 amounted to $8.4 billion compared with $7 billion reported in 2023.
Adjusted EBITDA in 2024 came in at $2.8 billion compared with $2.6 billion in 2023.
In 2024, adjusted diluted EPS came in at $3.34 per share compared with $3.24 reported in the previous year.
2025 Guidance
The company expects adjusted net interest expense within $500-$520 million and segment G&A (excluding RH) in the $650-$670 million range. The company expects RH Segment G&A to be approximately $100 million in 2025.
It expects capital expenditures, tenant inducements and incentives (including RH) to be in the range of $400-$450 million.
QSR Maintained Long-Term Guidance (2024-2028)
The company unveiled its long-term consolidated performance expectations from 2024 to 2028. It anticipates achieving more than 3% growth in comparable sales and at least 5% net restaurant growth. QSR projects system-wide sales growth exceeding 8%, with adjusted operating income expected to grow at a rate equal to or greater than the system-wide sales growth.
QSR’s Zacks Rank & Key Picks
Restaurant Brands currently has a Zacks Rank #4 (Sell).
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