Burger King's sales get another boost from Chicken Fries

AP News
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Posted: Jul 27, 2015 9:26 AM
Burger King's sales get another boost from Chicken Fries

NEW YORK (AP) — Burger King got a boost from the return of its "Chicken Fries."

Parent company Restaurant Brands International Inc. said Monday sales rose 7.9 percent at Burger King locations in the U.S. and Canada during the second quarter. The company attributed the increase to factors including the popularity of its "two for $5" deal, ongoing restaurant renovations and the return of its Chicken Fries.

McDonald's last week said sales fell 2 percent in the U.S. as promotions failed to meet expectations.

After taking Chicken Fries off the menu in 2012, Burger King had said last year it was bringing back the long, deep-fried piece of chicken as a limited-time offer in response to customer demands.

The campaign was so successful the company brought them back this year.

Restaurant Brands CEO Daniel Schwartz said Chicken Fries are profitable as well because they have a high gross margin and restaurants sell a lot of them. They are positioned as a snack or meal and cost around $3.

Schwartz declined to say whether customer traffic played a role in driving up sales, or if the increase in sales was drive entirely by people spending more per visit.

The company also cited the appearance of its "King" mascot at sporting events like the Belmont Stakes as an example of its improved marketing.

On a global basis, Burger King's sales rose 6.7 percent at established locations during the quarter. The figure rose 5.5 percent at Tim Hortons, which it also owns.

The company, based in Oakville, Ontario, opened an additional 141 Burger King locations around the world as well as another 52 Tim Hortons.

Restaurant Brands International earned $9.6 million, or 5 cents per share. That was down from $75.1 million, or 21 cents per share, in the year-ago period. The decline was attributable largely to preferred share dividends.

Not including one-time items, the company earned 30 cents per share. That was above the 24 cents per share analysts expected, according to FactSet.

Total revenue rose to $1.04 billion, also topping the $1.02 billion Wall Street expected.