Key points
- Restaurant Brands is the parent company and owner of iconic brands, including Burger King, Tim Horton’s, Firehouse Subs and Popeyes Louisiana Kitchen.
- The company acquired Carrols Restaurant, Burger King’s largest franchisee, for $9.55 in cash.
- With its “Reclaim the Flame” revitalization plan underway, Burger King is making progress in redesigning, updating and improving its restaurants, marketing and menu items.
- 5 stocks we like better than Restaurant Brands International
Quick-service restaurant company Restaurant Brands Inc. New York Stock Exchange: QSR owns four well-known fast food brands, including Tim Hortons, Burger King, Popeyes Louisiana Kitchen and Firehouse Subs.
The consumer discretionary company operates under a franchise model, generating more than $40 trillion in annual system-wide sales through more than 30,000 restaurants in more than 100 countries worldwide. The company does not own or operate the stores. Manages, markets and designs standards and procedures to support franchisees who generate revenue from franchise fees and royalties.
Carrols Restaurant Group
On January 16, 2024 the company acquired Carrols Restaurant Group Inc. NASDAQ: TASTE for $1 billion, or $9.55 per share. Carrols is Burger King’s largest franchisee, with 1,022 restaurants generating $1.8 billion in system sales. It also owns 60 Popeyes restaurants.
Carrols has been a franchisee of Burger King since 1976, operating 1,022 Burger King locations in 28 states and a franchisee of 60 Popeyes locations in six states as of 2019. Restaurant Brands will invest an additional $500 million over the next five years to renovate 600 of the restaurants acquired for the new prototypes financed by Carrols’ operating cash flow.
Burger King is getting a makeover
Burger launched its $400 million “Reclaim the Flame” makeover strategy in September 2022. The strategy will invest in remodeling, relocation, marketing and digital channels. While previous marketing campaigns focused on the flagship product Whopper, the new marketing campaign will focus on flame grilling.
The hallmark of Burger King’s burger has always been the backyard smoke flavor that comes from grilling its patties. Burger King’s international sales increased 7.6% and U.S. sales increased 6.6% in the third quarter of 2023.
Burger King is still behind McDonald’s Co. NYSE: MCD AND Wendy’s Co. NASDAQ: WED in the growth of its store units. The remodeled locations will be easier and more efficient for mobile ordering. The company is testing in-store kiosks and investing $30 million to improve its app. The company plans to increase wages and prices.
Enter King Bacon
Burger King has launched its first major menu promotion of 2024. It introduced the Candied Bacon Whopper on January 29, 2024. It is launching its Fiery Big Fish sandwich with Alaskan Pollack with Spicy Glaze. It launched a vegan Ultimate Bean Burger in February 2024 in the UK
The company also distributes cardboard crowns to all customers, underlining its new motto “You Rule.” Whopper Wednesdays is a new promotion with discounts and offers on Wednesdays.
Profitable and growing
Restaurant Brands saw burger sales across digital channels grow 40% in the third quarter of 2024. The company reported third-quarter 2023 earnings per share of 90 cents, beating analysts’ expectations by five cents, with revenue in increased 6.43% year-on-year (YoY) to $1.84 billion.
Its consolidated system-wide sales increased 10.9% year-over-year to $1.1 billion. Global comparable sales increased 7%, including 8.1% at Tim Hortons in Canada, 7.6% at Burger King International and 6.6% at Burger King in the United States. Fourth quarter 2023 results will be released on February 13, 2023.
Restaurant Brands analyst ratings and price targets I’m on MarketBeat. Search for shares of restaurant brand competitors and rivals with MarketBeat Stock Screener.
Daily pattern of the descending triangle
The daily candlestick chart on QSR illustrates a descending triangle pattern. The descending upper trendline was formed when the QSR peaked at $79.94 on January 31.
Lower highs and lower lows accompanied the sell-off towards the flat-bottomed trendline at $75.76 which overlaps the 50-period daily moving average (MA) support at $75.88. The daily market structure low (MSL) buy trigger formed at $77.50. The daily relative strength index (RSI) remained flat at the 50 band. The pullback support levels are at $75.76, $0.73.93, $72.60, and $71.01.
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