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Restaurant Brands' Burger King to Expand Into Baltic States

Zacks Equity Research

In an effort to drive sales, Restaurant Brands International Inc.’s QSR Burger King is planning to expand its footprint. To this end, the company has announced a new agreement to open restaurants in Estonia, Latvia and Lithuania. It doesn’t have any operations in these countries.

Burger King has given the exclusive development rights for the Baltic countries to Tallink Grupp. Per the agreement, the term of each license for Burger King restaurants opened will be for 20 years.

Tallink is planning to open many Burger King restaurants across Estonia, Latvia and Lithuania. The company will open its first restaurants in Latvia and Lithuania in the first half of 2020, whereas it will start operations in Estonia this winter.

President, Burger King and Popeyes EMEA, David Shear said “We are excited to develop beautiful new Burger King restaurants and introduce guests in the Baltics to our iconic brand featuring our great-tasting food with Tallink Grupp" said David Shear, President, Burger King and Popeyes EMEA”.

Burger King to Drive Growth

Restaurant Brands has a solid strategy at Burger King that focuses on enhancing restaurant image, technology, operations and marketing. This strategy is likely to drive sustainable comps over the long run. As of now, the company has made significant progress with respect to remodeling and modernizing its restaurants in the United States. Also, healthy progress on other technology-related initiatives at Burger King has been realized in this quarter.

Furthermore, Restaurant Brands launched Burger King mobile order and pay app in the United States. The company continues to expand the size of its delivery program, with availability in nearly 3,500 restaurants in the United States and more than 8,700 worldwide. In the second quarter, comparable sales at Burger King rose 3.6% owing to robust international sales. We believe the company’s decision to expand into Baltic states will further drive comps at Burger King.

Restaurant Brands is riding high on robust system-wide sales across its brands, solid expansion efforts, various sales building strategies and focus on franchise business model. As a result, shares of this Zacks Rank #2 (Buy) company have gained 33.7% year to date compared with the industry’s collective growth of 25.2%.

Other Key Picks

Other stocks, which warrant a look in the same space include, Brinker International, Inc. EAT, Chipotle Mexican Grill, Inc. CMG and Cracker Barrel Old Country Store, Inc. CBRL. All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Brinker International, Chipotle Mexican Grill and Cracker Barrel Old Country Store have an impressive long-term earnings growth rate of 5.9%, 18.4% and 9.5%, respectively.

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