Restaurant Brands (QSR) Checks Reveal 4 Key Takeaways - Longbow

Longbow Research analyst, Alton Stump, reiterated his Neutral rating on shares of Restaurant Brands International (NYSE: QSR) after Burger King checks indicate that $1 Chicken Nuggets Deal is helping Sales but irritating franchisees. The analyst noted 4 key takeaways from the checks:

1) The introduction of 10 chicken nuggets for $1 in mid-October generated an estimated 200 bp sales lift in 4Q, although contacted franchisees were not pleased with the margin pressure associated with this deeply discounted item.

2) As a partial offset, Burger King lapped a full quarter of its highly successful 2/$6 launch in mid-August 2017, compared to 3Q18 only lapping it for one-half of the quarter

3) Our contacts have a mostly cautious view on QSR’s recently announced “Burger King of Tomorrow” remodeling program, especially related to the plannedinterior changes

4) Corporate is planning to launch a new coffee program in the spring aimed at improving Burger King’s iced coffee offerings, which will require an investment of ~$15K for new equipment.

For an analyst ratings summary and ratings history on Restaurant Brands International click here. For more ratings news on Restaurant Brands International click here.

Shares of Restaurant Brands International closed at $55.40 yesterday.

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