Restaurant Brands International (NYSE: QSR), whose stock currently trades at around $65, generates its revenue primarily from its Tim Hortons brand which is projected to account for 61% of total revenues in 2019, while the Burger King brand is expected to contribute 31% to the top line. In this note we discuss the revenue segments of Restaurant Brands International, their historical performance, and expected Total Revenue for 2019. In recently released Q3 2019 results, the company reported a revenue of $1.46 billion, up 6% y-o-y. Meanwhile earnings were recorded at $0.72 per share up from $0.53 per share in the same period last year.
You can look at our interactive dashboard analysis ~ Restaurant Brands International Revenues: How does Restaurant Brands make money? ~ for more details.
Restaurant Brands International Business Model:
What Does Restaurant Brands offer?
- Restaurant Brands is one of the world’s largest quick service restaurant (“QSR”) companies with more than $30 billion in system-wide sales (in 2018) and over 25,000 restaurants in more than 100 countries and U.S. territories as of December 31, 2018. Their Tim Hortons®, Burger King®, and Popeyes® brands have similar franchise business models with complementary daypart mixes and product platforms. The brands are managed independently by the company. As of December 31, 2018, approximately 100% of total restaurants for each of the brands were franchised.
- The business generates revenue mainly from the following sources: (i) franchise revenues, consisting primarily of royalties; (ii) property revenues from properties they lease or sublease; and (iii) sales at Company restaurants.
Has 3 Operating Segments-
- Tim Hortons® Brand: Founded in 1964, Tim Hortons (“TH”) is one of the largest donut/coffee/tea restaurant chains in North America and the largest in Canada as measured by total number of restaurants. As of December 31, 2018, the company owned or franchised a total of 4,846 TH restaurants.
- Burger King® Brand: Founded in 1954, Burger King (“BK”) is the world’s second largest fast food hamburger restaurant (“FFHR”) chain as measured by total number of restaurants. As of December 31, 2018, the company owned or franchised a total of 17,796 BK restaurants in more than 100 countries and U.S. territories.
- Popeyes® Brand: Founded in 1972, Popeyes (“PLK”) is the world’s second largest quick service chicken concept as measured by total number of restaurants. As of December 31, 2018, the company owned or franchised a total of 3,102 PLK restaurants. PLK restaurants are quick service restaurants that distinguish themselves with a unique “Louisiana” style menu.
What Are The Alternatives?
- Major competitors are companies like McDonald’s, KFC, Subway, Chipotle, and other food chains.
What Is The Basis of Competition?
- Each brand competes on the basis of product choice, quality, affordability, service, and location. As the restaurant industry has few barriers to new entrants, the competitors include a variety of independent local operators, in addition to restaurant chains and franchises, and new competitors may emerge at any time.
Revenue growth expected in 2019 primarily from improvement in BK and PLK brands. For detailed information regarding change in number of restaurants and average revenue per restaurant please visit our interactive dashboard – Restaurant Brands’ Revenues
- Burger King Revenue has grown by 44.3% from $1.1 billion in 2016 to $1.6 billion in 2018, and is expected to grow by 8.3% to around $1.8 billion in 2019.
- Tim Hortons Revenue has grown by 9.7% from $3 billion in 2016 to $3.3 billion in 2018, and is expected to grow by 6.2% to around $3.5 billion in 2019.
- Popeyes (acquired in March 2017) Revenue has grown from $202 million in 2017 to $414 million in 2018, and is expected to grow by 8% to around $447 million in 2019.
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