Business News: Burger King’s parent company posts higher-than-expected profit and system-wide sales are up in 2019.
Restaurant Brands International on Friday reported quarterly earnings that exceeded Wall Avenue’s expectations as its system-wide gross sales exceeded the 2019 ranges. The company’s shares were largely unchanged in pre-market buying and selling. The company reported first-quarter fiscal web earnings of $ 270 million, or 58 cents per share, up from $ 224 million, or 48 cents per share, 12 months earlier.
Excluding gadgets, restaurant manufacturers earned 55 cents per share, beating the 50 cents per share anticipated by analysts interviewed by Refinitiv. Net sales increased 2.9% to $ 1.26 billion, beating expectations of $ 1.25 billion. The company said the increase in revenues was mainly driven by favorable foreign currency movements. Organic revenue, which eliminates the impact of foreign currency, declined due to Tim Hortons’ system-wide sales decline.
Tim Hortons reported a drop in sales in the same store of 2.3%, compared to a decline of 10.3% during the previous year period. Sales in the same stores as the Canadian coffee chain in the domestic market decreased by 3.3% in the quarter.
The coffee chain is also facing challenges as Covid-19 outbreaks have limited mobility in Canada. Ontario, home to nearly half of Tim Hortons’ Canadian footprint, is on a home stay regime until at least May 20. The province has just opened the first doses of the vaccines to people aged 40 or over, but the second doses won’t be distributed until late summer or early fall.
“Americans are experiencing a very different path from Covid than Canadians,” Restaurant Brands CEO Jose Cil told analysts. Sales of the same Burger King store increased 0.7% during the quarter. A year earlier, its sales in the same store dropped 3.7% as pandemic lockdowns were rolled out around the world. Worldwide, the burger chain saw an increase in temporary store closures this quarter. Sales in the same stores in the United States were a positive point, climbing 6.6%.
And after quarters of skyrocketing sales in the same store from his famous chicken sandwich, Popeyes, came to Earth after facing tough comparisons with same-store sales growth of 26.2% over the previous year period. Sales from the same store increased 1.5% this quarter. Sales in the same stores in the United States increased by 0.9%.
Yum Brands’ KFC and McDonald’s recently introduced their own chicken sandwiches, which means consumers have new items they may want to try. Both companies have reported strong demand in their recent earnings calls. Burger King is also planning its chicken sandwich, which will be introduced later this year.