Burger King Holdings Inc. (BKC) fiscal fourth-quarter sales were stung by a weak global economy and rampant discounting by fast-food chains, but profits rose 16%, topping low expectations on better margins in the U.S. and Canada, refranchising gains and a low tax rate.

Burger King, the world's second largest hamburger chain behind McDonald's Corp. (MCD), expects to see "soft" sales through Christmas with results improving in the second half of its fiscal year if consumer sentiment improves in line with economists' forecasts.

The chain held off on issuing specific guidance for fiscal 2010, but said it expects long-term annual earnings growth of 10% to 15% and same-store sales growth of 2% to 3%.

In addition, Burger King said it will slow new-store openings in the coming year to between 250 and 300, largely on "delayed commercial construction as the result of ongoing global economic pressures." The latest year's figure was 360, the highest in nearly a decade.

Shares rose 3.5% premarket to $18.40.

Mounting unemployment has pressured fast-food sales, leaving fewer commuters stopping in for breakfast and fewer customers going out to lunch. Declining grocery-store prices have increased incentives to eat at home.

Burger King sped up a shift in its advertising to value-based products such as its $1 Whopper Jr. to help drive traffic, though some analysts said Burger King still may have been a bit slow to change its focus. Franchisees also shot down a plan to offer a $1 double cheeseburger nationwide.

For the quarter ended June 30, the company reported a profit of $58.9 million, or 43 cents a share, up from $50.6 million, or 37 cents a share, a year earlier. The company in April projected 34 cents to 37 cents. The latest results included $8.6 million in so-called other income, largely from the refranchising effort, compared with a prior-year loss of $7.5 million.

Revenue decreased 2% to $629.9 million, while analysts expected $634 million.

Comparable-store sales, or sales open 13 months or longer excluding currency effects, fell 2.4% worldwide, with declines in U.S., Canada and Latin America offsetting a gain in the European, Middle East, Africa and Asia Pacific region.

Restaurant margin fell to 12.5% from 13.1% as higher labor costs, primarily in Germany, more than offset lower costs for food and paper products, though U.S. and Canadian stores showed improvements.

The tax rate of 21.6% provided a benefit as Burger King dissolved dormant foreign entities.

Chairman and Chief Executive John Chidsey said that as the company begins its new fiscal year, it sees some signs the world economy is stabilizing, though its still expects high unemployment levels will result in consumers eating out less.

-By Paul Ziobro, Dow Jones Newswires; 212-416-2194; paul.ziobro@dowjones.com

(Tess Stynes contributed to this report.)