Restaurant Brands International (TSX:QSR)(NYSE:QSR), the company which owns popular restaurant chains Tim Hortons, Burger King, Popeyes, and Firehouse Subs, has performed well over the past 12 months with its shares up 12%. But it hasn't always been that was as the company struggled amid the early stages of the pandemic and its five-year returns of 23% are well below the S&P 500's gains of 56% over that stretch.
However, the company could soon give investors a reason to be more bullish on the stock when it releases its latest quarterly results on May 2. The company has been working on a strategy to bolster its sales, called, "Reclaim the Flame," which it announced in September 2022. The plan involved investing $400 million in advertising and improving restaurant technology and kitchen equipment. The company has also been focusing on the quality of its whoppers. And it looks to be paying off with Burger King U.S. President Tom Curtis telling CNBC in a recent interview that, "we’re selling more Whoppers than we ever have. It’s had a really positive impact that we didn’t pay for or foresee on the business."
Last year, the company's overall comparable sales growth was 8.5%, after reporting growth of 7.9% in the previous year. Restaurant Brands' business could do well amid inflation as its restaurants could be cost-effective option for people who want to eat out but don't want to have a big bill.
If Restaurant Brands beats expectations next month, that could lead to some big gains for the stock as it could prove that it is potentially recession and inflation resistant. Today, it trades at around 21 times earnings and it hasn't been uncommon for the stock to trade at a higher premium in the past.
