By Judy McKinnon And Julie Jargon
Restaurant Brands International Inc., parent of Burger King and
Tim Hortons, posted a stronger-than-expected second-quarter profit
on Monday as both chains recorded same-store sales growth driven
partly by new product launches.
Oakville, Ontario-based Restaurant Brands said Tim Hortons
same-store sales were up 5.5%, while Burger King same-store sales
rose 6.7%. Systemwide sales were up 8.4% and 11.6%, respectively,
at the burger and coffee chains.
Burger King's sales growth is particularly notable at a time
when its biggest rival, McDonald's Corp., is struggling with
declining sales and some franchisees that are weighed down by debt.
In the quarter ended in June, McDonald's global same-store sales
dropped 0.7%. McDonald's attributed the 2% decline in its important
home market to new products that didn't sell well, such as a new
sirloin burger. Burger King said its growth in the quarter was
largely driven by new product launches including an A.1. bacon
cheeseburger and the return of chicken fries.
"We don't comment on our competitors but when you think about
everything we've done, it's all around delivering a better guest
experience," Restaurant Brands CEO Daniel Schwartz said in an
interview.
Although Burger King has been at odds with its franchisees in
the past, the company has been working on ways to boost their
business by strengthening a field coach program intended to help
franchisees cut costs and sell higher-margin products. Mr. Schwartz
said franchisee profitability is up about 30% versus a year
ago.
Restaurant Brands was formed last year when 3G Capital Partners
LP-controlled Burger King purchased Canadian coffee-and-doughnut
chain Tim Hortons for $11 billion.
The company had an overall second-quarter profit of $9.6
million, or 5 cents a share. Adjusted to exclude items, it earned
30 cents a share, ahead of the 25 cents analysts polled by Thomson
Reuters expected.
Revenue came in at $1.04 billion, also beating the $1.02 billion
analysts expected.
The company added 52 net new Tim Hortons restaurants in the
latest quarter and 141 new Burger King sites.
Write to Judy McKinnon at judy.mckinnon@wsj.com and Julie Jargon
at julie.jargon@wsj.com
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