Monday September 28, 2020

updated - September 28, 2020 Monday EDT

Burger King profit beats estimates as costs fall

Aug 01, 2013 12:28 PM EDT | By Staff Reporter
Burger King, earnings
Burger King
A new Burger King will soon be built separate from four retail stores in Duluth, Minn. (Not Pictured)
(Photo : Reuters)

Burger King Worldwide Inc reported a higher-than-expected 30 percent rise in quarterly profit, helped by a sharp fall in costs as the third-biggest U.S. hamburger chain moves to a fully franchised model.

Expenses fell nearly 65 percent as the company paid less for packaging, food, wages and rent.

Burger King, known for its Whopper hamburgers, said its net profit rose to $62.9 million, or 18 cents per share, from $48.2 million, or 14 cents per share, a year earlier.

Excluding items, the company reported earnings of 21 cents per share, topping analysts' average forecast of 19 cents, according to Thomson Reuters.

Quarterly global sales at established restaurants rose 0.6 percent, helped mainly by sales in Europe, the Middle East, Africa and Asia.

Analysts polled by Consensus Metrix had expected global same-restaurant sales to fall 0.1 percent.

Same-restaurant sales fell 0.5 percent in North America, where Burger King faces increased competition from Wendy's Co and McDonald's Corp.

Overall sales nearly halved to $278.3 million as the company moves to a fully franchised model. Analysts had expected sales of $322.3 million.

The company said it refranchised 305 restaurants in the quarter and has nearly completed its transformation.

Burger King does not record sales at franchise restaurants as revenue but does include royalties.

About 99 percent of the company's nearly 13,000 restaurants are now owned and operated by independent franchisees.

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