Restaurant Brands International Inc. stock (NYSE: QSR) is set to announce its fiscal first-quarter earnings on Thursday, May 8, 2025, with analysts estimating earnings of 78 cents per share on $2.15 billion in revenue. This projection indicates a 21% year-over-year drop in earnings and a 9% decrease in sales compared to last year’s figures of 99 cents per share and $2.35 billion in revenue. Historically, QSR stock has exhibited a pattern of underperforming after earnings announcements, with a decline noted 58% of the time, showing a median one-day drop of 2.7% and a maximum decline of 5%.
Looking forward to 2025, Restaurant Brands anticipates that Tim Hortons will see a return to net unit growth, partly fueled by expansion into underserved rural regions and western Canada. Additionally, Restaurant Brands plans to allocate between $400 million and $450 million on consolidated capital expenditures, tenant incentives, and other benefits. The company currently holds a market capitalization of $30 billion. Over the past twelve months, revenue was reported at $8.4 billion, showing operational profitability with $2.5 billion in operating profits and net income of $1.0 billion.
For event-driven traders, historical patterns may provide an advantage, whether by preparing ahead of earnings or responding to post-release movements. However, if you are looking for upside with less volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since inception.
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Restaurant Brands International’s Historical Odds Of Positive Post-Earnings Return
Here are some observations regarding one-day (1D) post-earnings returns:
- There are 19 earnings data points recorded over the last five years, with 8 positive and 11 negative one-day (1D) returns noted. In total, positive 1D returns were observed approximately 42% of the time.
- Interestingly, this percentage rises to 45% when evaluating data over the last 3 years instead of 5.
- The median of the 8 positive returns is 2.5%, while the median of the 11 negative returns is -2.7%
Further data related to observed 5-Day (5D) and 21-Day (21D) returns following earnings is compiled along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (though not beneficial when correlation is low) involves understanding the correlation between short-term and medium-term returns after earnings, identifying a pair with the strongest correlation, and executing the appropriate trade. For instance, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on both 5-year and 3-year (more recent) history. Please note that the correlation 1D_5D pertains to the correlation between 1D post-earnings returns and following 5D returns.
Is There Any Correlation With Peer Earnings?
At times, the performance of peers can affect post-earnings stock reactions. In fact, the pricing may begin prior to the earnings announcement. Below is some historical data concerning the previous post-earnings performance of Restaurant Brands International stock compared with the stock performance of peers that announced earnings just before Restaurant Brands International. For a fair benchmark, peer stock returns also represent post-earnings one-day (1D) returns.
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