Burger King’s profit climbs on strength overseas
NEW YORK (AP) — Burger King reported a higher quarterly profit on growth overseas and the popularity of new menu items like lower-calorie Satisfries french fries and the Big King burger that mimics McDonald’s Big Mac.
Burger King and other fast-food chains have been facing diners constrained by the economy and a storm-filled winter, along with tough competition from higher-priced quick-service restaurants like Chipotle. In response, Burger King has introduced new menu items and pushed deals.
The Miami-based chain says global sales rose 1.7 percent at locations open at least a year, with particularly strong results in Asia. In North America the figure edged up 0.2 percent.
By comparison, McDonald’s said the figure declined 1.2 percent in the U.S., while Wendy’s reported a 3.1 percent increase.
Burger King Worldwide Inc. introduced Satisfries with great fanfare in September. They have about 20 percent fewer calories than the chain’s regular fries as a result of a batter that blocks out some of the oil during frying.
They cost extra, with a small order priced at $1.89, or 30 cents more than the $1.59 for the regular fries.
Alex Macedo, the chain’s president of North American operations, said the Satisfries introduction has helped overall fry orders rise.
“It’s not a mainstream product, it doesn’t have the broadest appeal, but it is a premium product and has had success,” Macedo said. “People who were coming in and not ordering fries are now ordering fries.”
Macedo added the fries also show Burger King’s commitment to developing new products. Satisfries are just one the new menu creations from Burger King since the chain was purchased and taken private by 3G Capital, a Brazilian private investment firm. In 2012, 3G unveiled a revamped menu before announcing a deal to take the chain public again.
For the quarter ended Dec. 31, Burger King says it earned $66.8 million, or 19 cents per share. That compares with $48.6 million, or 14 cents per share, a year ago.
Not including one-time items, it said it earned 24 cents per share, above the 23 cents per share Wall Street expected.
The sale of company-owned restaurants to franchisees led to lower revenue $265.2 million, which was below the $268.2 million analysts expected. Such refranchising reduces corporate revenue because the company records only the fees the franchisee pays rather than the total restaurant sales.
Burger King had 13,667 restaurants in 2013, up from 12,997 in 2012.