OAKVILLE, ONT. — The launch of new breakfast items at Burger King helped parent company Restaurant Brands International Inc. achieve solid growth in the recent quarter. The company, which also owns the Tim Hortons brand, delivered strong profitability growth and accelerated the pace of restaurant development at both restaurant chains during the fiscal year, said Daniel Schwartz, chief executive officer.
|Daniel Schwartz, c.e.o. of Restaurant Brands|
“In 2016, we reached over 20,000 restaurants worldwide and over $24 billion in annual system-wide sales, but we still feel like we're just getting started,” Mr. Schwartz said during a Feb. 13 earnings call with financial analysts. “We continued to grow our top line at both brands through same-store sales growth and expansion of our restaurant footprint.”
Net income at Restaurant Brands in the year ended Dec. 31, 2016, was $345.6 million, equal to $1.48 per share on the common stock, up sharply from $103.9 million, or 51c per share, in the previous fiscal year. Revenues totaled $4,145.8 million, up from $4,052.2 million.
Net income in the fourth quarter was $118.4 million, or 50c per share, up from $51.7 million, or 25c, in the year-ago period. Total revenues increased to $1,111.4 million from $1,057 million.
Burger King comparable sales increased 2.3% for the year and 2.8% in the fourth quarter in constant currency.
“While the market conditions of Q3 continued to prevail in Q4, our continued focus on a balanced-menu architecture led to better results this quarter,” Mr. Schwartz said. “In the fourth quarter, we launched the Bacon King, a premium-priced product that stayed true to our core, which was well received by our guests and helped drive incremental sales at our restaurants. We also continue to grow our breakfast day part, a part of which was driven by a successful pancake promotion during the quarter.”
Burger King also recently introduced a new coffee blend to bolster morning day part performance. The company described it as a “renewed focus on coffee for us.”
At Tim Hortons, comparable sales rose 2.5% for the year and 0.2% in the quarter, driven by new menu items including grilled wraps, potato wedges and grilled breakfast sandwiches in Canada and strength in the brand’s coffee, cold beverage and breakfast sandwich platforms in the United States, Mr. Schwartz said.
“What most excites us about our U.S. Tim Hortons business, however, is the major expansion opportunity that lies ahead for the brand in this country,” he added. “Our strong fourth-quarter net restaurant growth of 2016 was a big improvement versus 2015 and is an indication of our improving new restaurant pipeline.”
By the end of 2016, the company signed development agreements to open Tim Hortons restaurants in Cincinnati, Columbus, Indianapolis and Minneapolis. The company also plans to launch espresso beverages at Tim Hortons this year.“Looking forward to 2017 and beyond, we're going to continue to focus on the same strategic priorities: guest satisfaction and franchisee profitability, which we believe will drive long-term growth of our brands,” Mr. Schwartz said.