A month has gone by since the last earnings report for Restaurant Brands (QSR). Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Restaurant Brands due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Restaurant Brands Q1 Earnings Beat Estimates, Rise Y/Y
Restaurant Brands reported first-quarter 2026 results, with earnings and revenues beating the Zacks Consensus Estimate and increasing on a year-over-year basis.
QSR’s Q1 Earnings & Revenue Discussion
The adjusted earnings per share (EPS) of 86 cents beat the Zacks Consensus Estimate of 82 cents by 4.9%. The reported figure grew 14.7% from the year-ago quarter’s adjusted EPS of 75 cents.
Quarterly net revenues of $2.26 billion beat the consensus mark by 1%. The top line increased 7.3% on a year-over-year basis.
QSR Converts Sales Lift Into Higher Profitability
System-wide sales were $11.51 billion, and system-wide sales growth was 6.2% on a constant-currency basis. Comparable sales increased 3.2%, up from 0.1% a year ago.
Net restaurant growth was 2.6%, taking the system restaurant count to 32,985 at quarter’s end. Adjusted operating income rose to $610 million from $539 million, and adjusted EBITDA increased to $706 million from $642 million.
Restaurant Brands Sees Burger King Outperformance
Burger King delivered system-wide sales of $2.85 billion, up from $2.70 billion in the prior-year quarter. Comparable sales increased 5.8% versus a 1.3% decline a year ago, reflecting stronger guest engagement in the U.S. market.
The segment reported total revenues of $365 million compared with $356 million in the year-ago quarter. Adjusted operating income improved to $115 million from $103 million, aided by higher system-wide sales and lower segment G&A, partially offset by the impact of refranchising activity.
QSR Faces Popeyes Pressure, but Firehouse Holds
Popeyes’ results remained pressured in the quarter. System-wide sales declined to $1.42 billion from $1.48 billion, and comparable sales fell 6.5% following a 4.0% decline in the year-ago quarter due to weaker demand trends in the United States.
Total revenues for Popeyes were $190 million, down from $194 million a year ago, and adjusted operating income edged down to $57 million from $60 million. Firehouse Subs provided a steadier backdrop, with system-wide sales rising to $347 million from $322 million and adjusted operating income increasing to $14 million from $11 million.
Restaurant Brands Benefits From International Acceleration
The International segment was the largest growth engine, with system-wide sales up 11.1% on a constant-currency basis to $5.15 billion. Comparable sales improved 5.7% versus 2.6% in the prior-year quarter, supported by brand momentum across markets.
International total revenues increased to $254 million from $218 million, and adjusted operating income surged to $196 million from $138 million, helped by revenue growth and lower segment F&P expenses. Tim Hortons also posted a positive quarter, with comparable sales up 1.6% and system-wide sales of $1.74 billion, while adjusted operating income increased to $229 million from $220 million.
QSR Highlights Cash Flow, Leverage and Capital Returns
Net cash provided by operating activities from continuing operations was $227 million, up from $118 million in the year-ago quarter. Free cash flow increased to $169 million from $54 million, and net leverage improved to 4.2x from 4.7x a year ago.
The company declared a quarterly dividend of $0.65 per common share and partnership exchangeable unit of RBI LP for the second quarter of 2026, payable July 7, to its holders of record June 23. QSR repurchased 463,442 common shares for $34 million in the quarter and bought back an additional 337,204 shares for $26 million through April 30, leaving $940 million under its authorization. For 2026, management reiterated expectations for segment G&A (excluding RH) of $600-$620 million, adjusted interest expense of $500-$520 million and total capex and cash inducements of around $400 million, while remaining on track for its long-term targets of 3%+ comparable sales and 8%+ organic adjusted operating income growth.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Restaurant Brands has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Restaurant Brands has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Restaurant Brands belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Cheesecake Factory (CAKE), has gained 5% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
Cheesecake Factory reported revenues of $978.83 million in the last reported quarter, representing a year-over-year change of +5.6%. EPS of $1.05 for the same period compares with $0.93 a year ago.
For the current quarter, Cheesecake Factory is expected to post earnings of $1.13 per share, indicating a change of -2.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Cheesecake Factory. Also, the stock has a VGM Score of B.
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Restaurant Brands International Inc. (QSR): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).