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Restaurant Brands' Comps Growth Aids, High Costs Hurt

Restaurant Brands International Inc. (NYSE: QSR) continues to benefit from robust comps growth, expansion efforts and strategic investments. Strong digital ordering is also aiding the company. However, high costs and general softening in the consumer environment are a concern. The company's earnings estimates for 2024 and 2025 have been revised upwards, reflecting analysts' optimism about a potential turnaround. Despite its shares having dropped 11.2% over the past six months, compared to the industry's 20.2% decline, the stock has demonstrated resilience in the past month, gaining 3.1% against the industry's 15.2% decline. Growth Drivers The company impressed investors with solid comps. In the fourth quarter of 2024, comps in Tim Hortons, Burger King and Popeyes came in at 6.9%, 3.8% and 5.7%, respectively, compared with 14.9%, 8.7% and 3.6% in the prior-year quarter. The upside was primarily driven by strengthening core offerings and enhanced restaurant operations. Restaurant Brands sees immense potential to expand its brands globally by strengthening the company's presence in existing markets and venturing into new ones. QSR is actively exploring avenues to accelerate the international growth of all three brands by establishing master franchisees with exclusive development rights and forming joint ventures with its new and existing franchisees. In 2023, expansion efforts extended to over 75 markets beyond the United States and Canada, securing 15 development and master franchise agreements for new ...