International sales boost Burger King's profit
MIAMI – Growth in international markets contributed to a 31% climb in income and a return to positive comparable sales for Burger King Worldwide, Inc. in the second quarter.
For the quarter ended June 30, the company had net income of $62.9 million, equal to 18c earnings per share on the common stock, compared with $48.2 million, or 14c per share, during the same quarter of the previous year. But total revenues for the quarter dropped 49% to $278.3 million, from $540.8 million during the same period of the previous year.
“Strength in EMEA and APAC helped drive a return to positive comparable sales in the second quarter,” said Daniel Schwartz, chief executive officer. “We continued to accelerate international growth with 125 net restaurant openings, primarily in China, Turkey, Russia and Brazil, which could not have been possible without the solid execution of our experienced joint venture and master franchisee partners on the ground.”
Additionally, the company refranchised 305 restaurants during the quarter, nearly completing its end-of-year goal to become a fully-franchised business model.
“This model is designed to efficiently leverage the strength of the Burger King brand while maximizing value for franchisees and shareholders,” Mr. Schwartz said. “We believe that our proven strategy, world-class employees and high-performance culture will allow us to continue to generate sustainable, long-term growth.”
System-wide comparable sales grew nearly 1% during the quarter, driven by 3% growth in the Europe, Middle East and Africa region and 4% growth in the Asia Pacific region, offsetting a sales slide in U.S. and Canada and Latin America and Caribbean markets.
While value-based promotions and limited-time premium offerings, including the summer barbecue menu, helped drive traffic in U.S. and Canada restaurants, comparable sales declined nearly 1% in the quarter, due to a challenging macroeconomic environment, more competition and a stronger prior year performance.
For the first six months of the fiscal year, Burger King had net income of $98.7 million, or 28c per share, up 58% from $62.5 million, or 18c per share, during the same six-month period of the previous year. Total revenues for the six months ended June 30 were $606 million, down 45% from $1,110.7 million.