Burger King profits down as sales grow
However, the poor revenues and foreign exchange headwinds from a weak euro were offset by net restaurant growth, property revenues and improved sales growth. The restaurant chain reported its fifth consecutive quarter of sales growth, with system-wide comparable sales up 1.4% and EBITDA up 6% to US$162m.
Expansion in the Russian market and promotional activity in the UK and and Germany helped drive 1.8% comparable sales growth in Europe, the Middle East and Africa, although Spain’s financial difficulties resulted in a deceleration in growth in a key market. North America achieved 1.6% sales growth, and the company said it had made progress in attracting a more diverse customer base. Restaurants across Latin America and the Caribbean also saw improved incremental traffic, driven by new value offerings in Brazil and Mexico, as well as premium offering, helping the company to a 2.7% growth in comparable sales.
However, there was a slowdown in Asia-Pacific, down 2.2% as a result of weak results in Australia, South Korea and New Zealand, but the company said it had hopes of doubling the number of restaurants in Malaysia and Singapore over the next five years as a result of refranchising.
This forms part of a policy, which has seen 221 company-owned restaurants refranchised in the quarter (188 in the USA, and 29 internationally), which contributed $31.6m of cash proceeds. Franchise and property expenses increased by 37.2% year-on-year.
Chief executive officer Bernardo Hees said: “We completed our first full quarter as a public company, with continued positive momentum, despite the challenging global economic environment.
"BKW is fortunate to have one of the most widely recognised and resilient brands in the global QSR industry and we are proud of the hard work and dedication of our employees and franchisees who are striving to deliver a strong finish to a critical year for the Burger King system.
"In the US and Canada, we are executing on our four pillar strategy, while internationally we completed additional refranchisings and development agreements that we believe will accelerate restaurant growth in the years to come.”
