Restaurant Brands tops sales estimates as Burger King deals draw diners in U.S.

Restaurant Brands International QSR-T beat Wall Street estimates for third-quarter comparable sales on Thursday, as value meals and new menu items drew more diners to its Burger King outlets in the U.S.

Value deals such as Whopper Wednesday, “2 for $5” and “3 for $7,” alongside marketing campaigns and new drinks like matcha, have attracted diners who might otherwise eat at home, helping the company buck an industry-wide slowdown that has hurt sales at rivals including McDonald’s MCD-N and Wendy’s WEN-Q.

Comparable sales at Burger King’s U.S. restaurants rose 8.4 per cent in the quarter ended Sept. 30, compared with a 3.2-per-cent rise a year earlier. The company’s overall comparable sales of 3.8 per cent beat analysts’ estimates of 3.25 per cent, according to data compiled by LSEG.

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Burrito chain owner Chipotle Mexican Grill CMG-N also beat third-quarter comparable sales estimates, helped by marketing efforts and limited-time menu items.

Burger King is investing up to US$700-million through 2028 under its multiyear “Reclaim the Flame” plan to boost sales and franchisee profitability. Up to US$550-million of that goes to “Royal Reset,” a program of remodels, restaurant technology and kitchen equipment.

As of Sept. 30, the company had funded US$198-million of it.

Meanwhile, quarterly comparable sales at its Tim Hortons chain rose 1.8 per cent in Canada, up from 0.1 per cent in the second quarter. Comparable sales in its Popeyes Louisiana Kitchen business fell 2.2 per cent, after declining 5.2 per cent in the second quarter.

The company has been raising menu prices in the low-single-digit percentages to offset higher costs for commodities such as beef, it had said in its second-quarter earnings call.

Adjusted earnings per share for the third quarter were US$1.10, up from US$1.03 a year earlier. Analysts had expected US$1.09 per share.

Third-quarter revenue of US$2.53-billion came in slightly below analysts’ estimates of US$2.54-billion.