Burger King Operator Restaurant Brands Lifts Retail Mood With Promise Of Strong 2025, But Caution Prevails After Q1 Miss

Restaurant Brands International (QSR) missed Wall Street expectations for quarterly revenue and profit last week, but struck a positive tone for the current quarter and maintained its forecast for the whole year.

The fast food and coffee chain operator reported that same-store sales for all its key brands — Popeyes, Burger King, and Tim Hortons — declined in the first quarter.

CEO Josh Kobza admitted "a slower start to the year" and said the company saw "encouraging momentum in Q2 and combined with responsible cost management, are on track to deliver stronger results through the balance of the year."

Shares are down 1.3% since Thursday, when the company published the results.

Following the report, Morgan Stanley and Deutsche Bank raised their price targets on the company's stock and maintained their 'Equal Weight' and 'Buy' ratings, respectively.

CFRA lowered its rating to 'Hold' from 'Buy.'

For Q1, Restaurant Brands' revenue rose to $2.11 billion, but missed analysts' estimate of $2.13 billion from LSEG/Reuters. Same-store sales rose a mere 0.1%.

Tim Hortons, responsible for over 40% of Restaurant Brands' quarterly revenue, posted a 0.1% drop in same-store sales. Burger King reported a 1.3% decline, while Popeyes registered a sharper 4% decrease in comparable store sales.

Restaurant Brands earned $0.75 per share profit, on an adjusted basis, missing estimates of $0.78.

The report is in the same bucket as restaurant and cafe peers such as McDonald's (MCD), Domino's (DPZ), Chipotle (CMG), and Starbucks (SBUX), which revealed pressures on sales and flagged weak consumer demand.

On Stocktwits, the retail sentiment for Restaurant Brands rose to 'neutral' from 'bearish' a week ago, while message volume rose to 'high.'

Among the restaurant stocks, Stocktwits users indicated that Wendy's (WEN) and Krispy Kreme (DNUT) were in considerably bad shape.

Restaurant Brands' stock is up 3.4% year to date.

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