Restaurant Brand's Standout International Segment Should Keep Driving Global Market Share Gains

Persistent traffic declines and inflation have put the domestic restaurant industry on its heels, but we think Restaurant Brands is prudently stepping up investment behind its brands and franchisees. Indeed, this has propelled global system growth to 7% over the last three years, outpacing the global industry’s 5.2% rate. We expect management to continue down this path—dialing up menu innovation, advertising, digital efforts, and remodels—with our forecast calling for capital expenditures to rise to 2.9% of revenue ($1.4 billion in total) over the next five years, up from 2.1% over the prior period. Taken together with RBI’s global portfolio of brands, backed by a well-capitalized international franchise base with significant whitespace, we forecast continued market share gains, with system sales growing about 6.4% annually over the next five years versus our 4.5% projection for the broader industry.