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Restaurant BrndLP Un (TSE:QSP.UN)
TSX:QSP.UN
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Restaurant BrndLP
(TSX:QSP.UN)
Rating:73Outperform
Price Target:―
Positive Factors
Revenue Growth
The company's robust revenue growth indicates successful brand management and market expansion, supporting long-term business sustainability.
Debt Management
Improved debt management enhances financial stability and provides the company with greater flexibility for strategic investments.
Digital Sales Growth
Strong growth in digital sales reflects successful adaptation to consumer trends and enhances customer engagement, driving future revenue.
Negative Factors
Net Profit Margin Pressure
Decreasing net profit margins suggest rising costs or pricing pressures, which could impact profitability if not managed effectively.
International Market Challenges
Struggles in international markets could hinder global expansion efforts and affect overall growth prospects if not addressed.
Higher G&A Expenses
Rising G&A expenses could pressure margins and reduce profitability, necessitating efficient cost management to maintain financial health.
Restaurant BrndLP (QSP.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$39.65B
Dividend Yield3.99%
Average Volume (3M)64.00
Price to Earnings (P/E)22.8
Beta (1Y)-0.14
Revenue Growth25.29%
EPS Growth-22.90%
CountryCA
Employees37,600
SectorConsumer Cyclical
Sector Strength75
IndustryRestaurants
Share Statistics
EPS (TTM)4.11
Shares Outstanding126,983,116
10 Day Avg. Volume112
30 Day Avg. Volume64
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Restaurant BrndLP Business Overview & Revenue Model
Company DescriptionRestaurant Brands International Limited Partnership operates and franchises quick service restaurants in the United States and internationally. The company operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes (PLK), and Firehouse Subs (FHS). Its restaurants offer blend coffee, tea, espresso-based hot and cold specialty drinks under Tim Hortons brand; flame-grilled hamburgers, chicken and other specialty sandwiches, french fries, and soft drinks under Burger King brand; fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice and other regional items under Popeyes brand; hot and hearty subs piled high with quality meats and cheese, as well as chopped salads, chili and soups, signature and other sides, soft drinks, and local specialties under Firehouse Subs brand. As of December 31, 2021, it owned or franchised a total of 5,291 TH restaurants; 19,247 BK restaurants; 3,705 PLK restaurants; and 1,213 FHS. Restaurant Brands International Inc. serves as the general partner of the company. The company was formerly known as New Red Canada Limited Partnership and changed its name to Restaurant Brands International Limited Partnership in December 2014. The company was founded in 1954 and is headquartered in Toronto, Canada. Restaurant Brands International Limited Partnership is a subsidiary of Restaurant Brands International Inc.
How the Company Makes MoneyRestaurant BrndLP makes money primarily through franchise fees, royalty income, and management services. The company earns revenue by licensing its portfolio of restaurant brands to franchisees, who pay initial franchise fees and ongoing royalties based on a percentage of their sales. Additionally, Restaurant BrndLP generates income by offering comprehensive management services to ensure operational efficiency and brand consistency across its franchise network. Strategic partnerships with suppliers and marketing firms also play a significant role in enhancing brand value and expanding market reach, contributing to the company's overall earnings.
Restaurant BrndLP Earnings Call Summary
Earnings Call Date:Oct 24, 2023
(Q1-2024)
| % Change Since: |
Next Earnings Date:Apr 25, 2024
Earnings Call Sentiment Positive
The earnings call provided a positive outlook on system-wide sales growth and strong brand performance, particularly in the U.S. and Canadian markets. However, challenges in international markets and increased G&A expenses were noted as areas of concern.Q1-2024 Updates
Positive Updates
Strong System-Wide Sales Growth
First quarter consolidated comparable sales of 4.6% and net restaurant growth of 3.9%. This translated into system-wide sales growth of 8.1% and organic adjusted operating income growth of 7.7%.
Tim Hortons Canada Success
Tim Hortons in Canada reported a 7.5% increase in comparable sales, including mid-single-digit traffic growth and 8.3% growth in system-wide sales.
Burger King U.S. Outperformance
Burger King U.S. comparable sales and traffic outperformed the industry, driven by operational improvements and a balanced menu of value and calendar initiatives.
POPEYES U.S. Growth
POPEYES U.S. grew comparable sales by 6.2% and net restaurants by 4.0%, resulting in system-wide sales growth of 10.2%.
Digital Sales Growth
Increased mobile order and pay, kiosk usage, and adoption of loyalty programs drove digital sales growth of 37% year-over-year for Burger King, resulting in a digital sales mix of 17%.
Negative Updates
International Market Challenges
Challenges in certain international markets like China impacted near-term performance. International comparable sales were 4.2% with an 8.4% net restaurant growth, driving system-wide sales growth of 11.6%.
Higher G&A Expenses
Segment G&A increased by $16 million year-over-year, primarily due to higher compensation-related expenses associated with increased headcount.
Bad Debt Expenses
Recorded over $7.5 million of net bad debt expenses compared to $5.5 million in Q1 of '23, impacting international royalties and Tim Hortons supply chain business.
Company Guidance
In the Restaurant Brands International Q1 2024 earnings call, the company reported several key metrics reflecting their performance and strategic direction. They achieved a 4.6% increase in consolidated comparable sales, with net restaurant growth at 3.9%, translating to an 8.1% system-wide sales growth and a 7.7% growth in organic adjusted operating income. Tim Hortons in Canada reported a 7.5% increase in comparable sales, driven by mid-single-digit traffic growth and a robust marketing calendar. Internationally, comparable sales rose by 4.2%, with net restaurant growth at 8.4%, contributing to an 11.6% system-wide sales increase. The company plans to maintain mid-4% net restaurant growth for 2024, with development ramping up in the second half of the year. Additionally, they have committed to a $300 million investment to remodel 1,100 Burger King restaurants, aiming to achieve between 85% and 90% modern image by 2028. The guidance for 2024 includes segment G&A between $665 million and $685 million and consolidated CapEx of around $300 million.Restaurant BrndLP Financial Statement Overview
Summary
Restaurant BrndLP demonstrates strong revenue growth and efficient cost management. The company maintains healthy operating margins and has significantly improved its debt-to-equity ratio. However, a slight decrease in net profit margin and a relatively low equity ratio present some risks.Income Statement
Restaurant BrndLP demonstrates strong revenue growth with a 19.72% increase from the previous year. The gross profit margin is robust at 100%, indicating efficient cost management. However, the net profit margin decreased slightly to 12.15% from 16.94%, which suggests some pressure on profitability. Both EBIT and EBITDA margins are healthy at 28.78%, reflecting strong operating performance.85
Very Positive
Balance Sheet
The company maintains a stable equity position with an equity ratio of 12.63%. The debt-to-equity ratio improved significantly to 0.64, indicating reduced leverage risk. Return on equity increased to 32.82%, showcasing efficient use of equity to generate profits. However, the relatively low equity ratio suggests potential vulnerabilities if liabilities increase.73
Positive
Cash Flow
Free cash flow grew by 8.24%, indicating positive cash generation. The operating cash flow to net income ratio is 1.47, suggesting strong cash conversion from profits. The free cash flow to net income ratio stands at 1.28, reflecting sufficient free cash flow to support net income. While growth is positive, the company should focus on maintaining cash flow growth to support future investments.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.11B | 8.41B | 7.02B | 6.50B | 5.74B | 4.97B |
| Gross Profit | 3.42B | 3.02B | 2.80B | 2.60B | 2.37B | 1.97B |
| EBITDA | 2.50B | 2.66B | 2.24B | 2.07B | 2.04B | 1.50B |
| Net Income | 859.00M | 1.02B | 1.19B | 1.01B | 838.00M | 486.00M |
Balance Sheet | ||||||
| Total Assets | 25.69B | 24.63B | 23.39B | 22.75B | 23.25B | 22.78B |
| Cash, Cash Equivalents and Short-Term Investments | 1.03B | 1.33B | 1.14B | 1.18B | 1.09B | 1.56B |
| Total Debt | 16.00B | 15.96B | 14.52B | 14.49B | 14.62B | 14.12B |
| Total Liabilities | 20.60B | 19.79B | 18.66B | 18.48B | 19.39B | 19.06B |
| Stockholders Equity | 3.32B | 3.11B | 2.87B | 2.50B | 2.24B | 2.17B |
Cash Flow | ||||||
| Free Cash Flow | 1.36B | 1.30B | 1.20B | 1.39B | 1.62B | 804.00M |
| Operating Cash Flow | 1.60B | 1.50B | 1.32B | 1.49B | 1.73B | 921.00M |
| Investing Cash Flow | -306.69M | -660.00M | 11.00M | -64.00M | -1.10B | -79.00M |
| Financing Cash Flow | -1.08B | -625.00M | -1.37B | -1.31B | -1.09B | -821.00M |
Restaurant BrndLP Technical Analysis
Negative
87.45
Price Trends
91.31
Negative
92.00
Negative
92.30
Negative
Market Momentum
-1.58
Negative
45.92
Neutral
40.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:QSP.UN, the sentiment is Negative. The current price of 87.45 is below the 20-day moving average (MA) of 87.81, below the 50-day MA of 91.31, and below the 200-day MA of 92.30, indicating a bearish trend. The MACD of -1.58 indicates Negative momentum. The RSI at 45.92 is Neutral, neither overbought nor oversold. The STOCH value of 40.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:QSP.UN.
Restaurant BrndLP Risk Analysis
Restaurant BrndLP disclosed 34 risk factors in its most recent earnings report. Restaurant BrndLP reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Restaurant BrndLP Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$39.65B | 22.77 | 24.42% | 3.99% | 25.29% | -22.90% | |
61 Neutral | $18.09B | 12.97 | -1.60% | 2.98% | 1.42% | -15.92% | |
| ― | $28.16B | 23.49 | 27.00% | 3.78% | ― | ― | |
| ― | $38.06B | 42.26 | 94.57% | 0.21% | ― | ― | |
| ― | $378.10M | 16.87 | 10.14% | 5.84% | ― | ― | |
45 Neutral | C$17.72M | ― | ― | -2.40% | 9.13% | ||
| ― | $633.33M | 23.59 | 4.59% | 3.26% | ― | ― |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:QSP.UN
Restaurant BrndLP
87.45
-3.94
-4.31%
QSR
Restaurant Brands International
63.48
-3.27
-4.90%
DLMAF
Dollarama
137.73
39.50
40.21%
PZRIF
Pizza Pizza Royalty
11.40
2.61
29.69%
TSE:ODD
Odd Burger Corporation
0.19
0.04
26.67%
MTYFF
MTY Food Group
27.69
-2.77
-9.09%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.