Restaurant Brands International (TSX:QSR)(NYSE:QSR) just showed how resilient its business model is, recently beating its quarterly sales and profit estimates. This success proves its multi-brand strategy is firing on all cylinders.
The strong performance was driven by two key areas: fantastic traffic at Tim Hortons, which isn't feeling the same economic pinch as the U.S. market, and a smart pivot to value deals at Burger King, which is successfully pulling in budget-focused consumers. This one-two punch is allowing RBI to navigate the wider macro pressures that have shaken consumer confidence and even caused rivals like Chipotle to stumble.
For the quarter ending September 30, the Toronto-based company saw huge demand at Tim Hortons. That's its largest business, and it helps that only about 11% of its stores are in the U.S. Meanwhile, Burger King really leaned into value to grow its traffic. It turns out that deals like its '2 for $5' and '3 for $7' offers are exactly what customers want right now.
This strategy paid off in the financials. Quarterly revenue climbed to $2.45 billion, which was a nice beat over the $2.4 billion analysts were expecting. Adjusted profit also came in strong at $1.03 per share, beating estimates there as well. Maybe the most impressive figure was the 4% growth in same-store sales, which is a massive jump from the tiny 0.3% growth the company experienced last year.
The stock is trading at a modest 12 times its future earnings. When you factor in its solid 3.7% dividend yield and that reasonable valuation, Restaurant Brands looks like a compelling option for dividend-focused investors who are searching for stability and a reliable payout in a very uncertain market.
