Restaurant Brands beats 4Q profit forecasts

AP News
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Posted: Feb 16, 2016 9:55 AM
Restaurant Brands beats 4Q profit forecasts

OAKVILLE, Ontario (AP) — Restaurant Brands International on Tuesday reported a fourth-quarter profit that beat expectations, as a key sales figure rose at Burger King and Tim Hortons.

Sales at established Burger King locations globally rose 3.9 percent in the period, while the figure rose 6.3 percent at established Tim Hortons locations.

In the U.S. and Canada, the company said Burger King's sales rose 2.8 percent at established locations as menu items such as the A.1. Halloween Whopper and Chicken Fries helped boost sales.

RBC Capital Markets analyst David Palmer noted the increase was below the 5.7 percent growth for McDonald's and 4.8 percent growth for Wendy's in the period and that he was "somewhat concerned" about intensifying competition in the industry. But he said he was "intrigued" by Burger King's plans to add grilled hot dogs to its U.S. menu starting Feb. 23.

Since taking over Burger King in 2010, investment firm 3G Capital has been focusing on striking deals with local operators to expand the chain's footprint in regions overseas, which also boosts its revenue from franchising fees. A similar logic later drove the company's acquisition of Tim Hortons; 3G saw the Canadian coffee-and-doughnut chain as one that has global name recognition, but plenty of room to open stores in new regions.

For the three months ended Dec. 31, Restaurant Brands said it earned $119.2 million, or 25 cents per share. Excluding one-time items, it earned 35 cents per share. That was more than the 31 cents per share analysts expected, according to Zacks Investment Research.

The Oakville, Ontario-based company said total revenue of $1.06 billion, boosted by new store openings.

Restaurant Brands shares rose $2.47, or 7.7 percent, to $34.48 in morning trading Tuesday. The stock has dropped 16 percent in the last 12 months.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on QSR at http://www.zacks.com/ap/QSR

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Keywords: Restaurant Brands, Earnings Report