Restaurant Brands International topped market estimates for quarterly results on Tuesday, signaling its Burger King turnaround plans were bearing fruit, with the chain drawing more customers through improved marketing and new technology at its outlets.
Having previously struggled to drive sales in the US, Burger King is now ramping up investments in restaurant remodels, advertising and new equipment, with plans to add new fryers, broilers and toasters to kitchens over the next six quarters to boost service speed.
Second Quarter
In the second quarter, Burger King invested $10 million (€9.10 million) toward advertising as part of the turnaround plan. About 96% of its US franchisees have also shown willingness to boost their own advertising spend, chief corporate officer Duncan Fulton said in an interview with Reuters.
Data from research firm M Science showed Burger King gained market share in May for the first time in over three years, due to promotions like the Whopper Jr. Duo deal and limited-time launches such as the 'Spider-Verse' Whopper.
The Whopper
CEO Josh Kobza hinted the iconic Whopper might not make a return to discount menus of Burger King US in the future.
"The Whopper is our core flagship product. We took that off the two-for-$5 discount menu last year, because it's important to highlight the quality of the product as opposed to discounting too much," Kobza told Reuters.
'Very Surprised'
Footfall at Burger King US - though still slightly negative - improved sequentially, with comparable sales growth of 8.3% in the quarter beating estimates of a 4.5% rise. Tim Hortons also posted a better-than-expected same-store sales rise of 12.5% in Canada.
"Frankly I was very surprised at the beat across all of their businesses...I have to give management credit for the type of execution that they're operating on right now," said Sante Faustini III, director of product intelligence at M Science.
Global comparable sales at Restaurant Brands rose about 10% in the quarter ended June 30, beating estimates of 5.75%. Adjusted per-share profit of 85 cents also topped Refinitiv estimates of 77 cents.
