A sign in front of a Burger King restaurant on February 15, 2022 in Daly City, California.
Justin Sullivan | Getty Images
Restaurant Brands International Burger King and Tim Hortons reported increases in sales Thursday, joining fast food companies seeing sales rise as consumers look for more affordable options.
Results come after the opponent Yum Brands Wednesday also reported increased sales at its Taco Bell and KFC stores. The company said it is seeing no change in consumer behavior overall and that premium menus are becoming more popular in the US.
And last week McDonald’s said its U.S. same-store sales were driven by stronger traffic and higher prices. The burger giant said it’s attracting more customers who choose fast food rather than dine at more expensive places.
Restaurant Brands CEO Jose Seal told CNBC that the company does not see any material being sold down or out of its chains. Like the rest of the industry, Burger King, Popeyes, and Tim Hortons have raised prices to keep food and labor costs down.
“We work closely with our franchisees to make sure we take into account all factors: the CPI, eating out and eating at home,” he said.
Shares of Restaurant Brand rose less than 1% in morning trading.
Here’s what the company said compared to what Wall Street expected, based on a survey of analysts at Refinitiv:
- Earnings per share: 96 cents adjusted vs. expected 80 cents.
- Revenue: $1.73 billion vs. $1.66 billion expected
Net sales for the quarter rose 15.5% to $1.73 billion. Global same-store sales grew 9.1%, with digital sales now accounting for about a third of system-wide sales.
Burger King reported a 10.3% increase in same-store sales, helped by its overseas results. In the US, that figure is up 4% as Restaurant Brands works to revive sales through a restructuring plan.
Tim Horton’s same-store sales increased 9.8%, which the company attributed in part to the new menu items.
The coffee shop chain reported an 11.1% increase in same-store sales in Canada, indicating that it has gained a foothold. Demand for its breakfast and lunch products is higher, and sales of iced coffee drinks are also on the rise. However, places in Canadian city centers are lagging behind as office workers continue to work from home.
At Popeyes Louisiana Kitchen, same-store sales increased by 3.1%. U.S. fried chicken chain sales rose 1.3%.
The latest addition to the Restaurant Brands portfolio, Firehouse Subs, reported solid same-store sales. The company bought the sandwich chain in late 2021 for $1 billion and has focused on expanding it internationally.
For the three months ended Sept. 30, Restaurant Brands posted a net income of $530 million, or $1.17 per share, compared to $329 million, or 70 cents per share, a year earlier.
Like other multinational companies, Restaurant Brands’ results have been hit by the strong dollar. The company reported a loss of $30 million from foreign exchange differences.
Excluding items, the company earned 96 cents per share.