Unlike McDonalds — which owns some 84% of its outlets in Russia — corporations reminiscent of Burger King, Subway and Papa John’s often operate via franchise agreements there. Burger King said it demanded the most important operator of its franchises suspend restaurant operations in Russia, but that “they’ve refused.”
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Restaurant Brands International on Friday reported weaker-than-expected quarterly revenue, hurt by Burger King’s disappointing same-store sales growth.
Shares of the corporate were down greater than 2% in premarket trading.
Here’s what Restaurant Brands reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly generally known as Refinitiv:
- Earnings per share: 90 cents adjusted vs. 86 cents expected
- Revenue: $1.84 billion vs. $1.87 billion expected
Restaurant Brands reported third-quarter net income attributable to shareholders of $252 million, or 79 cents per share, down from $360 million, or $1.17 per share, a yr earlier.
Excluding items, the restaurant company earned 90 cents per share.
Net sales rose 6.4% to $1.84 billion. Restaurant Brands said that unfavorable currency exchange rates hurt Tim Hortons, which accounts for roughly 60% of the corporate’s revenue.
The corporate reported same-store sales growth of seven% for the quarter.
Burger King’s same-store sales grew 7.2%, falling in need of StreetAccount estimates of 8.6%. The burger chain’s international same-store sales increased 7.6%, while the metric rose 6.6% within the U.S.
Burger King’s U.S. business reported flat traffic for the quarter, Restaurant Brands CEO Josh Kobza told CNBC.
“Back in the previous couple of quarters, we had been behind the industry when it comes to our same-store traffic, and that is been progressively convalescing every quarter since last yr,” he said. “So it was an enormous milestone for us now to get to flat traffic.”
Burger King has been attempting to rejuvenate its U.S. business for greater than a yr through its $400 million “Reclaim the Flame” plan. That strategy got here after the chain lagged its rivals domestically for several years. As a part of the turnaround plan, Burger King has leaned into the Whopper, renovated its restaurants and chipped its own money into the promoting fund typically fueled by franchisees.
Tim Hortons’ same-store sales growth of 6.8% met Wall Street’s expectations. In Canada, the coffee chain’s same-store sales climbed 8.1% within the quarter. But in China, a vital growth marketplace for the chain, Tim Hortons saw a “little little bit of a deceleration” from the second quarter, in accordance with Kobza.
Popeyes was Restaurant Brands’ only chain to outperform expectations for same-store sales growth. The fried chicken chain reported the metric grew 7%, including a 5.6% increase within the U.S. That beat StreetAccount estimates of 5% growth.
Popeyes recently overtook KFC because the No. 2 chicken chain within the U.S.