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Summary
- Fast-food chain Popeyes is set to expand its business in Mexico via a partnership with asset management company JK Capital.
- Owner Restaurant Brands said that it plans to open hundreds of Popeyes outlets in the country over the next few years.
- Restaurant Brands stock was up by about a per cent on Friday morning (11.05AM EST) following Popeyes’ expansion announcement.
Fast-food chain Popeyes, which is run by Restaurant Brands International Inc (TSX:QSR), is set to expand its business in Mexico via a partnership with asset management company JK Capital.
In its official announcement on Friday, March 19, Restaurant Brands said that it plans to open hundreds of Popeyes outlets in the country over the next few years.
Popeyes’ Mexico presence is currently limited to only the city of Guadalajara. The first of its new outlets is set to open in Mexico City sometime this year, the company said.
Restaurant Brands bought Popeyes Louisiana Kitchen for US$ 1.8 billion via its indirect subsidiary Orange Inc in March 2017. Along with Popeyes, Restaurant Brands also owns quick-service chains Burger King and Tim Hortons.
Let’s take a look at Restaurant Brands’ overall recent performance.
Restaurant Brands International Inc (TSX:QSR) Stock Performance
Restaurant Brands International stock was up by about a per cent on Friday morning (11.05AM EST) following Popeyes’ expansion announcement. It has surged by over 96 per cent in the past one year and by nearly three per cent year-to-date (YTD).
1-year chart of Restaurant Brands International’s stock performance (Source: EODHD/Others/Thomson Reuters)
The consumer stock posts a return on equity (ROE) of 20.63 per cent, a return on assets (ROA) of 2.13 per cent and a price-to-earnings ratio (P/E) of 31.8 at the moment, according to TMX.
The Miami-based restaurant chain also pays a quarterly dividend of US$ 0.53, which currently holds a dividend yield of 3.37 per cent, as per the data on TMX.
Restaurant Brands International Latest Financials
Restaurant Brands saw its system-wide sales growth decrease by 8.6 per cent year-over-year (YoY) in the pandemic-inflicted year of 2020.
However, while subsidiaries Burger King and Tim Hortons recorded a decline in annual system-wide sales, that of Popeyes’ grew from US$ 4.39 billion in 2019 to US$ 5.14 billion in 2020.
Restaurant Brands’ overall adjusted net income amounted to US$ 948 million last year, notably down from US$ 1.27 billion in 2019.
As the food and services industry in general took a major hit amid the pandemic last year, Restaurant Brands was no exception. The company pointed in its latest financial report that its quarterly results were primarily impacted by the temporary lockdowns and public health restrictions.
By the end of December 2020, Restaurant Brands saw over 96 per cent of its outlets reopen around the world. However, the restaurant giant noted that it expects COVID-19 to have a “continued impact” on its performance in 2021.
©Kalkine Group 2021
