Burger King Didn’t Deliver a Whopper in the Third Quarter
Burger King Worldwide (NYSE: BKW) released its third quarter results early Monday morning. It wasn’t a whopper, but the company wasn’t walloped either. Diluted earnings per share increased 31.6 percent, or by 23 cents per share. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (or, EBITDA) had a 16.7 percent increase to $176.0 million.
The company posted the good numbers even though comparable system-wide sales growth was 0.9 percent for the quarter, compared to 1.4 percent for the third-quarter last year. Total revenues for the quarter stood at $275.1 million, down from third-quarter 2012′s $455.7 million. The release said the positive results were “primarily due to lower depreciation expense as a result of our global refranchising initiative and lower interest costs as a result of last year’s refinancing.” The company also lowered management and administrative costs.
U.S. comparable sales growth was down, 0.3 percent. In the third-quarter of 2012, the company had comparable sales growth for the U.S. of 1.6 percent.Positive sales growth came from Europe, the Middle East and Africa, and the Asia Pacific region. Burger King added more franchises in both regions, as well as in Latin America for a total of 133 new stores opened this quarter. It closed thirteen franchises in the U.S.
The company saw enough positive indications from overseas to revise its fourth quarter expectations on earnings per share up, from 6 cents for the quarter, to 7 cents. Burger King also hopes to regain some of the U.S. market with the launch of a healthier fry, what Burger King calls SATISFRIES.
Daniel Schwartz, Burger King’s CEO said, “We believe that new products like this, combined with our focus on improving operations will enhance the guest experience and drive increased restaurant profitability. Our exceptional franchisees, partners and employees are aligned to execute on our strategy and we expect to finish 2013 strong.”