A QSR full course serves up weak demand, margin pressures as sides

ON THE MENU: While Westlife remains an outlier, valuations for most players on the higher side

Except for Westlife Foodworld (Westlife), a weak 2022-23 (FY23) January-March (fourth quarter, or Q4) quarter performance and a muted near-term outlook led to a downward revision of earnings estimates for quick-service restaurant (QSR) players. Brokerages have slashed estimates by as much as 10 per cent for 2023-24 (FY24) and 2024-25 (FY25). The downward revisions have weighed on the performance of listed players, who have underperformed the market with low single-digit returns over the past month.

Before this, stocks, led by Burger King franchisee Restaurant Brands Asia (RBA), had seen a major rally in the April-May period, delivering double-digit returns. In