Restaurant Brands International Inc. (NYSE:QSR) set some aggressive growth targets during an investor event on Thursday.
The restaurant chain operator expects to achieve a minimum of 40K restaurants, $60B in system-wide sales and $3.2B in adjusted operating income by 2028. Those targets are expected to be hit by delivering average annual results over the next five years of +3% comparable sales growth, +5% plus net restaurant growth, and +8% plus system-wide sales growth. A few of the key snippets from the QSR outlook are below.
"Our long-term investment horizon should result in compelling business performance and drive at least low double digit annual total shareholder returns over the next 5 years."
"When you add up the sum of the parts of our company, we have a pretty remarkable combination of growth drivers."
"The outlook we are sharing for growth is really the lowest average performance that we expect over the next five-years, with real upside potential from there."
Looking ahead to 2028, the Tim Hortons chain will focus on growing the PM daypart beyond its 9% market share for 2023 through wraps, bowls, savory pastries, snacking and new product innovation. Tim Hortons is also planning significant growth in cold beverages from its 25% market share for 2023, driven initially by cold brew, real fruit quenchers, specialty beverages and innovation around its iconic Iced Capp.
For the Burger King chain, the company has made a substantial financial commitment to co-invest with franchisees to accelerate modern image in the U.S. and shift the franchise system towards smaller operators who live close to their restaurants. This includes the pending acquisition of Carrols Restaurant Group and announced plan to fully modernize and then refranchise the vast majority of its portfolio of approximately 1,000 restaurants, which we expect to be completed within 5 to 7 years. Looking ahead to 2028, major growth drivers in the business include accelerating to get 85% to 90% of the system to modern image, driving incremental sales through remodels and effective marketing, executing the Carrols reimaging and refranchising plan, and improving guest experience through training and operational excellence at the restaurant.
As for Popeyes, the brand will continue daypart and occasion expansion of its menu, in line with recent examples of the Chicken Sandwich and Wings and focus on attracting more profitable digital guests and increasing its digital mix of sales. The brand will accelerate its emphasis on improving restaurant operations through its Easy to Run kitchens. Popeyes expects to grow its U.S. and Canada restaurant base with top restaurant operators from nearly 3,400 in 2023 to over 4,200 restaurants by 2028.
As for the Firehouse Subs business, the chain is expected to contribute to QSR's broader outlook by rapidly scaling its digital channels to 100% of sales over the next few years, improving speed of service through equipment innovation, and accelerating net restaurant growth in attractive and under-penetrated markets across the U.S. and Canada with a path to ramp its pace of development to 300 net new annual units over the next few years, resulting in 800 new units by 2028.
Shares of QSR are down 3% on a year-to-date basis.
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