Burger King revival powers Restaurant Brands' Q2 results beat
By Deborah Mary Sophia
(Reuters) -Restaurant Brands International topped market estimates for quarterly results on Tuesday, as improved marketing and promotional offers drew more customers to its Burger King chain while traffic at Tim Hortons held strong, sending its shares up more than 4%.
Burger King had previously struggled to drive sales in the United States, but the brand has ramped up investments in restaurant remodels, new technology, advertising and kitchen equipment and also streamlined its menus and operations.
In the second quarter alone, the burger chain invested $12 million as part of its turnaround plan, including $10 million towards advertising. It has also been closing underperforming stores, with total Burger King U.S. restaurant count falling 2.2% to 6,900 in the quarter.
The efforts seem to have paid off as Burger King gained market share in May for the first time in more than three years, data from research firm M Science showed.
Limited-time launches such as the «Spider-Verse» Whopper and offers including the Whopper Jr. Duo deal drove higher spend at Burger King and attracted new, younger customers, executives said on a post-earnings call.
While traffic at Burger King U.S. still remained slightly negative, it improved sequentially. Comparable sales were up 8.3% in the quarter, above analysts' estimate of a 4.5% rise.
«It was a very strong quarter. 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.
Meanwhile, Tim Hortons' comparable sales grew a better-than-expected 12.5% in Canada, aided by strong demand
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