Burger King Owner Restaurant Brands Beats Estimates For Quarterly Profit And Revenue
Restaurant Brands International Inc has beaten estimates for quarterly profit and revenue, as Americans spent more at its Burger King outlets after COVID-19 restrictions were eased.
U.S.-listed stock of the Toronto, Ontario-based restaurant chain rose 4% as it also said it would repurchase about $1 billion of its shares over the next two years.
Several U.S. restaurant chains, including KFC parent Yum Brands and McDonald's, have been investing in their loyalty programs and launching new menu items to boost sales at a time when dining in at restaurants is bouncing back.
Restaurant Brands' Popeyes brand rolled out its first-ever rewards program in June to tackle competition from McDonald's and KFC, while its Burger King brand launched its own hand-breaded fried chicken sandwich this year.
"(The) chicken sandwich continues to show healthy volumes in restaurants around the country, double the previous chicken sandwich, and has expanded Burger King's demographic attracting ... those with higher incomes and spending power," Chief Executive Officer Jose Cil said in an earning call.
Comparable sales at Burger King in the United States increased 13% from a year earlier, above estimates of 12.3% and pre-pandemic levels two years ago.
Total revenue for Restaurant Brands jumped 37% from a year earlier to $1.44 billion, beating Refinitiv IBES estimates of $1.37 billion.
Net income attributable to common shareholders more than doubled to $259 million, or 84 cents per share. Excluding items, it earned 77 cents per share, beating 62 cents estimates.
The better-than-expected results came even as Popeyes posted a surprise decline in comparable sales and Tim Hortons missed Wall Street expectations due to coronavirus curbs in Canada.
Cil, however, said sales at Tim Hortons have improved sequentially in July, with Ontario, which houses nearly half of its restaurants, relaxing curbs on eateries.
Cinven Buys Majority Stake In Restaurant Brands' Iberia Unit
In other Restaurant Brands news, Buyout fund Cinven has bought a majority stake in Restaurant Brands International's unit in the Iberian peninsula, in a deal valuing RB Iberia at €1 billion, the companies have said in a joint statement.
The founders of Restaurant Brands Iberia and Burger King Europe GmbH - the European branch of the fast-food chain - will retain a minority stake in the Iberian unit, and the current executive team will stay in place, the statement added.
Spanish residents' growing appetite for restaurant meals and fast food, and the pandemic-induced boom in digital food delivery are favourable market trends able to shore up substantial growth for RB Iberia, the companies said.
"This is an attractive opportunity for primary investment: (RB Iberia) has a solid strategic position in the growing market of fast food in the Iberian peninsula and we're delighted to join forces...to accelerate its growth," Cinven partner Jorge Quemada said.
RB Iberia holds the master franchise rights for Burger King in Spain, Portugal, Gibraltar, and Andorra, as well as for the fried chicken chain Popeyes and doughnut shop Tim Hortons in Spain.