Investors have been happy with the performance from Restaurant Brands International (NYSE:QSR) this year as the chain takes full advantage of rising global demand for fast food. The owner of the Tim Hortons, Popeyes, and Burger King franchises has even outperformed McDonald's in 2019 thanks to healthy growth in the burger and fried chicken niches.

Restaurant Brands recently announced earnings results that extended that growth streak, with marketing wins that helped deliver some of its best sales gains in years.

Let's take a closer look.

Five young adults share a fast-food meal.

Image source: Getty Images.

A winning strategy

Comparable-store sales fell 1% at the core Tim Hortons brand, indicating modest market share losses against competition like McDonald's and Dunkin Brands. Yet Restaurant Brands made up for that stumble with breakout results from its other two chains. Burger King's comps landed at 4.8%, just below McDonald's 6% increase, and the fastest growth in the U.S. since 2015. Popeyes set an almost 20-year high, with comps expanding by over 10% in the U.S. market on the strength of hit product launches.

Together with a 5% increase in the restaurant footprint, these gains amounted to 9% higher sales as revenue improved to $1.46 billion from $1.38 billion a year ago.

Finances

The restaurant stock's finances were strong, with operating income rising 7% over the past nine months to $1.5 billion. Restaurant Brands got a big assist from the expanding revenue base, but earnings were also supported by restrained expenses and more-modest food price inflation. Free cash flow improved to $1.34 billion over the past 12 months compared with $1.15 billion over the preceding year, and management supplemented that growth with new debt that was financed at lower interest rates. Overall, its cash position rose while net debt edged down to $11 billion, or just under 5 times adjusted annual earnings.

Looking ahead

CEO Jose Cil and his team are no doubt excited about the flexibility provided by that resource hoard today, especially given the tantalizing growth opportunities they see around the world. Executives have high hopes of adding over 1,500 Popeyes locations in China over the next decade, and the recent 18% sales spike in international markets has to add to their confidence on that score.

At the same time, accelerating gains in the U.S. suggest Burger King could mount a more serious challenge to rivals like Domino's and McDonald's. Restaurant Brands has a long way to go if it wants to make real progress toward its long-term goal of operating 40,000 fast-food restaurants around the world versus its current base of 26,000. And rivals will surely have their own limited-time offers and menu tweaks over the next few months in hopes of stalling some of the recent gains won by Popeyes and Burger King.

But for now, Restaurant Brands has demonstrated that it can accelerate sales growth and spur interest in its biggest franchises. Market-thumping shareholder returns are on the way if the chain can build on those early wins.