Financial Performance

Burger King Delivers 3.9% Comp Sales Gain

The other chains owned by Restaurant Brands sagged, with comp sales falling 0.8% and 2.7% at Tim Horton's and Popeyes, respectively.
Matthew HellerAugust 3, 2017

Restaurant Brands International reported a slight drop in profit but the company’s Burger King chain delivered another strong quarter, with same-store sales beating Wall Street estimates.

Net income fell to $89.5 million in the second quarter from $90.9 million a year earlier on revenues of $1.13 billion, up nearly 9%. Restaurant Brands also owns Tim Hortons and Popeyes Louisiana Kitchen, which it acquired for $1.8 billion in February to add more diversity to its restaurant lineup.

Adjusted earnings came in at 51 cents share, topping analysts’ estimates of 45 cents per share.

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The increase in revenues was powered by Burger King, which posted comparable sales growth of 3.9% compared to declines of 0.8% at Tim Hortons and 2.7% at Popeyes Louisiana Kitchen. Analysts at Consensus Metrix were expecting a 2.7% rise in Burger King’s comps.

“In the second quarter, we continued to grow system-wide sales and profitability for all three of our iconic brands,” Restaurant Brands CEO Daniel Schwartz said in a news release. “In particular, we had notable strength at Burger King, with both strong comparable sales growth and net restaurant growth.”

“We also made good progress integrating Popeyes, and continue to be excited about the long-term growth potential for the brand,” he added.

System-wide sales rose 2.6% at Tim Hortons, 10.6% at Burger King, and 3.3% at Popeyes. Burger King’s growth was primarily due to U.S. comparable sales growth of 3.0%.

As Reuters reports, “Like many other fast-food chains, Burger King has been trying to lure millennials by tapping mobile technologies and adding more options to its menu.” Chains are hoping mobile order and pay will draw consumers seeking to avoid drive-thru or counter lines.

Burger King has also recently begun offering a Whopper with a new seasoning as well as Froot Loops and Lucky Charms shakes and the Chicken Parmesan Sandwich.

Schwartz attributed Popeyes’ comp sales decline to “increased competitive activity in the quarter combined with the lapping of a successful promotion in the prior year period.”