Tuesday, October 30 08:00:17
Burger King Worldwide Inc turned in stronger-than-expected U.S. and Canadian restaurant sales for the latest quarter - when rival McDonald's Corp posted its worst quarterly restaurant sales growth in nine years. Burger King executives declined to say whether additional business is coming from McDonald's, whose U.S. dominance has softened amid tougher competition from resurgent chains like Burger King and Yum Brands Inc's Taco Bell.
"We're keeping the sales and the share that we believe we gained earlier this year," Chief Financial Officer Daniel Schwartz said in an interview with Reuters. The pace of the company's sales at established restaurants has accelerated so far in October, Schwartz said. Burger King, known for its "Whopper" hamburgers, attributed the gains to its increased focus on value-priced foods that lure in more customers. Executives also said sales of higher-priced limited-time food specials, such as this summer's BBQ menu, are helping.
Miami-based Burger King has further boosted its business with wrap sandwiches, soft-serve ice cream, salads, fruit smoothies and other new menu items that have attracted women and people over the age of 55. Burger King historically has appealed largely to young males. Its menu changes mirror many of those made at McDonald's, which traditionally has boasted a broader range of customers. The company, the third-largest U.S. hamburger chain after McDonald's and Wendy's Co, said third-quarter net income fell to $6.6 million, or 2 cents per share, from $38.8 million, or 11 cents per share, a year earlier.
Excluding the impact of restaurant sales to franchisees and foreign exchange, Burger King earned 17 cents per share - beating the 15 cents per share expected on average by analysts, according to Thomson Reuters . System-wide comparable sales, or sales at company-owned and franchise restaurants open at least 13 months, rose 1.4 percent. Three analysts polled by Consensus Metrix had estimated a 1.56 percent gain in same-restaurant sales. Quarterly comparable sales in the United States and Canada rose 1.6 percent - slightly better than analysts' expected - driven by Burger King's summer BBQ and chicken dishes. Revenue fell about 26 percent to $451.1 million due to refranchising deals and a stronger dollar, Burger King said.
The company, which went public in June, also initiated a quarterly cash dividend of 4 cents per share. Burger King's return to the stock market came less than two years after it was taken private in a $3.26 billion sale to Brazilian investment fund 3G Capital Management LLC. It went public through a "reverse-merger" in which Justice Holdings, a traded shell company co-founded by hedge fund veteran Bill Ackman, absorbed Burger King. Shares of Burger King, which debuted at $14.50 on June 20, closed at $14.95 on the New York Stock Exchange on Friday. Major U.S. stock markets were closed on Monday due to Hurricane Sandy. ( C) Reuters