Burger King shares up after growth beats analysts' projections
05 November 2014
Shares of Burger King Worldwide were up yesterday after the fast food chain reported third-quarter US and Canada sales growth that beat Wall Street expectations. The company, however, disclosed an income drop.
Burger King shares were up nearly 1.4 per cent at $32.75 in morning trade, in a reversal of a pre-market drop.
The Miami-based company that acquired Canada doughnut and coffee chain Tim Hortons in an $11 billion deal and looked to emerge as the world's third-largest fast food giant, said same-store North America sales increased 3.6 per cent, which came as the best showing in two years.
The result overtook the 2.5 per cent growth forecast by financial analysts.
The company credited the increased sales partly to the reintroduction of Chicken Fries during the July-September quarter, along with continued popularity of the BBQ Bacon Whopper sandwich as also the introduction of the A1 Ultimate Bacon Cheeseburger.
According to the company, global same-store sales were up 2.4 per cent topping the 2.1 per cent forecast by Wall Street.
Adjusted third-quarter earnings per share came in at 27 cents.
The fast food company reported a quarterly net loss of $23.5 million, or 7 cents per share, during the quarter against a $68.2 million profit, or 19 cents per share, during the same period of 2013.
Meanwhile, Burger King said bringing back its ''Chicken Fries'' helped sales jump in the US and Canada by the biggest amount in two years, Sapa-AP reported.
McDonald's had earlier reported a 3.3 per cent decline in US sales for the same time, due to increased competition, it said.
According to Alex Macedo, Burger King's president of North American operation, who spoke in phone interview, the chain's strategy of focusing on fewer, ''more impactful'' new menu items was paying off.
The company had announced in that it was bringing back Chicken Fries for a limited time as ongoing guest outcries had reached a point where they could not be ignored any longer.
Chicken Fries, deep-fried pieces of chicken in the shape of French fries were introduced in 2005 but were dropped from the menu in 2012.
According to commentators, the return of the Chicken Fries was among the many marketing initiatives that Burger King had taken after investment firm 3G Capital took the chain public again in 2012.