Burger King U.S. Sales Rise as Restaurant Brands Posts Mixed Quarterly Results

Restaurant Brands International reported mixed fiscal third-quarter results on Thursday, October 29, as its restaurant chains delivered uneven sales performances. Burger King's ongoing U.S. turnaround showed progress, while Popeyes continued to struggle with competition from other chicken chains. Adjusted earnings came in slightly above Wall Street expectations, but revenue was just below forecasts.

The company earned an adjusted $1.10 per share, excluding certain non-cash items, compared with the $1.09 analysts had expected in a survey by LSEG. Revenue totaled $2.53 billion, against the survey's forecast of $2.54 billion. The results left the company a penny ahead of the earnings estimate despite missing the revenue target.

Net income attributable to common shareholders reached $542 million, or $1.54 per share, for the quarter. That was up from $315 million, or 96 cents per share, in the same period a year earlier. Net revenue increased 3.1%, while same-store sales across the company's restaurants rose 3.8%. The overall sales gain came alongside differing results across its brands and markets.

Burger King led the portfolio's performance, recording an 8.4% increase in U.S. same-store sales. The chain is partway through a multiyear effort to improve its business in its home market. That turnaround centers on making improvements to both its food and its restaurants, with the latest quarterly sales results showing signs that the effort is succeeding.

Tim Hortons recorded more modest growth in Canada, its home market. Same-store sales there increased 1.8% during the quarter. Its Canadian growth rate was below both Burger King's U.S. increase and the 3.8% same-store sales gain reported across Restaurant Brands' restaurants.

Popeyes again trailed the company's other brands, with U.S. same-store sales declining 2.2%. The fried chicken chain has faced difficulties in recent quarters as competing chicken restaurants have used discounts to draw away its customers. Its decline contrasted with the sales growth reported by Burger King and Tim Hortons in their home markets.

Restaurant Brands is seeking to restore Popeyes' performance by improving restaurant operations and concentrating on the chain's core menu. Those efforts form the company's approach to a comeback as Popeyes continues to face pressure from its rivals.

Outside its home markets, Restaurant Brands' international business posted same-store sales growth of 3.9%. Burger King locations fueled that increase, adding an international contribution to the burger chain's strong U.S. performance.