Restaurant Brands International (TSX:QSR) had a challenging 2024, ending the year down nearly 10% as weaker consumer spending, inflationary pressures, and broader market volatility weighed on its stock. With this, QSR stock underperformed the broader market by a wide margin as the TSX Composite inched up by 18% last year.
Now, as we enter 2025, investors are wondering whether QSR can turn things around. With the stock trading 20% below its 52-week high but still offering a 3.7% annualized dividend yield, could this be a buying opportunity for long-term investors?
In this article, I’ll break down the outlook for Restaurant Brands International in 2025 by highlighting its recent financial growth trends, industry outlook, and key growth drivers. But first, let’s dive into the key factors that may be weighing on QSR stock of late.
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What’s hurting QSR stock performance
If you don’t know it already, Restaurant Brands International is a Toronto-based giant behind some of the world’s most recognizable fast-food brands, including Tim Hortons, Burger King, Popeyes Louisiana Kitchen, and Firehouse Subs. It currently has a market cap of $28.8 billion as its stock trades at $80.64 per share. Despite its strong brand presence, QSR stock struggled last year.
A big part of this weakness in its share price comes down to weaker-than-expected consumer spending. With inflation biting into household budgets, fewer consumers are spending on fast food. That’s especially true in North America, where same-store sales at its Burger King and Popeyes brands saw a dip in its latest reported quarter.
While the Tim Hortons chain posted slightly better results, Restaurant Brands’s international sales weren’t enough to offset softness in the United States. On top of that, the company has been navigating higher costs, whether it’s wages, ingredients, or marketing expenses. These factors likely explain why QSR stock has underperformed the broader market by a wide margin over the last year.
How the business is holding up
Despite these short-term challenges, however, QSR isn’t exactly struggling. In the third quarter of 2024, the company’s total revenue climbed 24.7% YoY (year over year) to hit US$2.3 billion. More importantly, its adjusted operating profit rose 6.1% from a year ago, while adjusted earnings edged up 4.6% YoY to US$0.93 per share.
While its same-store sales growth slowed down last quarter, QSR expanded its restaurant footprint by 1,150 locations over the past year, bringing its total count to over 31,500 restaurants globally. That’s a strong sign the company is still expanding, especially in international markets where demand remains high.
Why this could be a great stock for 2025
With QSR stock down from its highs, I see it as a bargain — especially considering its strong global presence and expansion plans. I expect the company’s continued focus on investing in digital sales and store remodels to drive growth and boost profitability in the coming years. And with a 3.7% dividend yield, Foolish Investors can still get paid while they wait for the turnaround. If consumer spending picks up as interest rates decline, QSR stock could witness a strong rebound.
