Burger King Sales Slowing, Parent Shares Fall Slightly

Burger King parent company Restaurant Brands International has reported that same-store sales in the United States have fallen 0.5 percent through the third quarter (ending September 30).

Company CEO Danial Schwartz said, during the company’s earnings call, on Monday, “Challenging industry dynamics continued from the second and into the third quarter.”   At the same time, though, Restaurant Brands International’s profit climbed 30 percent through the quarter, from $182.9 million (or 24 cents per share) to $238.8 million (or 36 cents per share). However, higher company profits was mostly driven by improved global performance of Burger King (internationally) and, perhaps more importantly, its sister chain Tim Hortons.

Furthermore, revenue increased by 5.5 percent—from $1.02 billion to $1.08 billion—over the last year. Total comparable sales at Burger King rose at least 1.7 percent through the third quarter, thought that is significantly lower than the 6.2 percent rise from the same quarter a year earlier.

Schwartz goes on to say that Burger King, specifically, continues to develop ways to improve service speed at US stores, noting the installation of timers in drive thrus, for one.

He continues, “We have made some considerable progress. We still have a long way to go, but we’re much better today than we were a year ago.”

In addition, Burger King is also remodeling US stores with a goal to grow its unit count after reporting a decline, last year. The numbers show that the fast food chain did, in fact, add 16 locations in the United States to bring its total unit count to 7,382 locations.

With all that in mind, Schwartz comments that Burger King is more focused on long term growth over quarter-to-quarter results. As such, he makes sure to note that Burger King’s average unit volumes have grown in recent years from slightly more than $1 million to $1.3 million, while also significantly increasing profitability for franchisees.

Schwartz goes on to say, “We’re here for the long run. All the decisions we take are in the best interests of our brands for the long run.”

Overall, then, total expenses and costs also fell 3 percent, to $655.2 million; the company did manage to raise its quarterly dividend to 17 cents per share, up from 16 cents.

Leave a Reply