Burger King earnings up, revenues down

Burger King earnings up, revenues down

- Comparable sales in U.S. and Canada negative. - Company introduces new turkey burger. - Market in Russia expanding and strong.

BURGER King Worldwide Inc. has reported first-quarter net profits that increased significantly despite revenues that were lower than its first-quarter numbers of the year before.

Burger King said it dealt with a challenging competitive and economic environment and negative worldwide comparable sales, the latter a consequence of the impact of leap day in February 2012 and negative comparable sales in its U.S.-Canada and Latin America-Caribbean divisions.

The company said this was partially offset by positive comparable sales in its Europe, Africa and Middle East and Asia Pacific divisions, as well as net restaurant growth in the trailing 12 months.

Financial results for Burger King are shown in the Table.

For its U.S.-Canada division, Burger King said comparable sales declined 3.0% due to strong year-ago results, a challenging economic environment and heightened competitive activity.

However, the company said comparable sales were positive at the end of the quarter in March as it took "a more balanced approach" to premium and value offerings, pairing limited-time premium menu offers with value-oriented promotions such as its $1.29 Whopper Jr. and "2 for $5" specials.

Additionally, Burger King said it launched a turkey burger in the first quarter — the first in the company's history — which was one of the best-performing limited-time offers in the quarter.

For its Latin America-Caribbean division, Burger King said comparable sales decreased 1.3% due to weak performance in Mexico and Puerto Rico, where markets were challenging but were somewhat offset by new products such as smoothies.

For its Europe, Africa and Middle East division, Burger King said comparable sales increased 0.8% on the continued success of promotions in Germany and the U.K. plus an expanding and strong market in Russia.

For its Asia Pacific division, Burger King said comparable sales were up 2.7% on positive results in Australia and South Korea due to value promotions in the two countries. The company added, though, that markets in Japan and New Zealand were weak.

Burger King said its board of directors approved a cash dividend of 6 cents per share on the company's common stock — a 20% increase from its previous dividend — payable May 15 to holders of record May 1.

The company said its board also authorized a $200 million stock repurchase to be made in the open markets through May 31, 2016.

Burger King, based in Miami, Fla., is the second-largest quick-service company by number of restaurants and the third largest by sales in the U.S. It reported 2012 revenues of $1.966 billion.

 

Burger King earnings and revenues (million $)*

 

-First quarter-

 

2013

2012

Revenues

 

 

Company restaurants

$121.1

396.2

Franchise/property

206.6

173.7

Total

327.7

569.9

Earnings

35.8

14.3

Earnings per share (cents)

10

4

*For the quarters ended March 31, 2013, and March 31, 2012.

 

Volume:85 Issue:18

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish