Restaurant Brands International (QSR) shares jumped more than 3% in early trading Friday after the quick-service restaurant company reported 1Q profit and sales up from a year ago.
Restaurant Brands’ revenue came in at $1.26 billion for the quarter ended March 31, an increase of 2.4% from $1.23 billion in the prior-year quarter. A reopening US economy and government stimulus checks increased spending at the company’s Burger King chain.
Net income attributable to common shareholders was $179 million ($0.58 per share) in 1Q 2021 compared to a profit of $144 million ($0.48 per share) in 1Q 2020. Meanwhile, adjusted EPS was $0.55, up from $0.48 a year ago.
Analysts, on average, expected adjusted EPS of $0.50 on $1.25 billion in revenue, according to financial data firm Refinitiv.
The parent company of Tim Hortons, Popeyes, and Burger King returned to growth in 1Q, with system-wide sales up 1.4% from 2019. It added 148 new net restaurants in the quarter.
Restaurant Brands’ CEO José E. Cil said, “Our first-quarter results signal our return to growth with system-wide sales surpassing Q1 2019 and net restaurant growth nearly matching our best-ever Q1 performance in 2018. We are excited by the global growth potential of our brands and are encouraged by this early momentum as we work toward a return to historic levels of unit growth this year.”
In addition, Tim Hortons recorded 31% digital sales in 1Q in Canada and generated two million app downloads in March alone. (See Restaurant Brands International stock analysis on TipRanks.)
Earlier this week, UBS analyst Dennis Geiger reiterated a Buy rating on the stock and raised its price target from $74.00 (C$90.83) for a 6.3% upside potential.
The rest of the Street is cautiously optimistic about QSR with a Moderate Buy consensus rating based on 11 Buys and 5 Holds. The average analyst price target of C$85.13 implies that the shares are fully priced at the current level.