Burger King owner misses estimates as Tim Hortons sales decline
|Toronto Star 29 Apr 2019 at 10:29|
Burger King-owner Restaurant Brands International Inc. fell after reporting first-quarter earnings that missed analysts’ estimates amid an unexpected decline in sales at its Tim Hortons chain.
Same-store sales, a key performance metric for restaurant companies, fell 0.6 per cent at Tim Hortons. Analysts had projected growth of 1.9 per cent, according to Consensus Metrix. Restaurant Brands’s earnings per share of 55 cents was 3 cents lower than the average projection.
Restaurant Brands didn’t give a clear reason for the drop at Tim Hortons, and said the coffee and doughnut chain remains strong. In the U.S., competition is getting fierce as rivals cut prices and McDonald’s boosts advertising of egg sandwiches and McCafe drinks. Burger King is healthier, with sales growth of 2.2 per cent beating estimates.
The chain’s tech push is helping it capture more diners that are looking for convenience. The chain is adding self-order kiosks and digital menu boards, along with offering discounts and coupons for its mobile app.
Restaurant Brands is pushing big in China, where other chains are also ramping up growth. Burger King is opening more stores there, while Tim Hortons has opened three in that market, with plans for more than 1,500 in China over the next decade.
The shares dropped as much as 3.7 per cent in premarket trading. The stock has climbed 27 per cent this year through Friday’s close, outperforming McDonald’s, which had gained 11 per cent.