​Ontario Company's stock climbs 8 percent after opening new stores

The Oakville, Ontario company has said that it sees potential for expansion for the famous chains outside their home markets, and has struck franchising deals with local operators around the world to do so.
  • Franchise India Team Editor
Restaurant India

Restaurant Brands International has reported a better-than-expected profit for the fourth quarter as it expanded the number of Burger King and Tim Hortons locations around the world and reaped in higher sales.

The Oakville, Ontario company has said that it sees potential for expansion for the famous chains outside their home markets, and has struck franchising deals with local operators around the world to do so. For instance, Restaurant Brands says it now was more than 100 Burger King locations in France, compared with none just a few years ago.

In the last three months of 2016, the company opened 495 Burger King locations globally, ending the year with 15,738 stores.

For Tim Hortons, it added 121 stores in the period, bringing the total to 4,613.

RBC Capital Markets analyst David Palmer noted that the company has cited savings initiatives such as cost reductions in the supply chain.

At established locations, the company said Burger King's sales rose 2.8 percent, including 1.8 percent in the U.S. and Canada. Restaurant Brands does not disclose how much of that increase was driven by higher spending, versus an increase in the number of customer visits. The latter is seen as a key indicator of health that major chains including McDonald's and Dunkin' Donuts have struggled with amid heightened competition.

Tim Hortons' sales edged up 0.2 percent globally. For the period ended Dec. 31, Restaurant Brands earned USD185.9 million, or 50 cents. Earnings, adjusted for one-time items, came to 44 cents per share. That was two cents more than Wall Street expected, according to Zacks Investment Research.

Total revenue was USD1.11 billion in the period.

Restaurant Brands shares have climbed nearly 8 percent since the beginning of the year. The stock has increased 69 percent in the last 12 months.

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