Burger King posts biggest sales gain in almost a decade

  • By Craig Giammona Bloomberg News
  • Monday, April 27, 2015 1:12pm
  • Business

Burger King posted its best North American growth in almost a decade after cheap chicken nuggets and limited-time items drew customers, helping parent company Restaurant Brands International beat earnings estimates.

Sales at Burger King locations open at least 13 months jumped 6.9 percent in the region last quarter, the most in more than nine years, Restaurant Brands said on Monday. The company, formed last year when Burger King took over the Canadian doughnut chain Tim Hortons, posted overall earnings of 18 cents a share, excluding some items. Analysts surveyed by Bloomberg had predicted profit of 15 cents.

Restaurant Brands, the world’s third-largest fast-food company, used promotions and discounted items to boost sales at Burger King in an increasingly competitive industry. The results contrasted with those of McDonald’s, which has struggled to pull itself out of a sales slump. That chain plans to unveil a turnaround plan next week after reporting a 2.3 percent decline in same-store sales last quarter.

“There’s no silver bullet — it’s about consistent execution and running great restaurants,” Daniel Schwartz, the chief executive officer of Restaurant Brands, said in an interview.

Shares of Restaurant Brands, based in Oakville, Ontario, had gained 6.5 percent this year through the end of last week.

Burger King revived a 15-cent nugget special in January, soon after McDonald’s started advertising an order of 50 McNuggets for $9.99, or 20 cents each. The company also brought back the Yumbo ham-and-cheese sandwich after a 40-year hiatus, selling it as part of two-for-$5 menu.

Total same-store sales rose 4.6 percent in the first quarter. That topped the 2.5 percent growth analysts had estimated, according Consensus Metrix. Burger King has more than 14,300 restaurants worldwide, including about 7,400 in North America.

Tim Hortons, a doughnut chain that’s concentrated in Canada, posted a same-store sales increase of 5.3 percent, beating analysts’ 3.5 percent projection.

Burger King recently announced it would make chicken fries a permanent menu item, an escalation of its battle with McDonald’s over poultry fare. First sold in 2005, Burger King brought back chicken fries for about two months beginning in August and saw sales at established restaurants in the U.S. and Canada jump 3.6 percent.

At Tim Hortons, sales were boosted by dark roast coffee and the chain’s new crispy chicken club sandwich, the company said.

“It’s a combination of running great restaurants and launching great products,” Schwartz said.

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