Menu innovations lift BK, Tim Hortons performance
April 29, 2016
by Monica Watrous
Grilled Dogs at Burger King boosted sales in the quarter.
OAKVILLE, ONT. — Flame-grilled hot dogs at Burger King and a pulled pork sandwich at Tim Hortons contributed to profit growth for parent company Restaurant Brands International Inc. in the first quarter. Net income attributable to common shareholders in the period ended March 31 was $50 million, equal to 22 cents per share on the common stock, which compared with a loss of $8.3 million in the year-ago quarter. Adjusted EBITDA increased 23 percent on an organic basis to $407.8 million from $355.1 million in fiscal 2015.
Revenues for the quarter totaled $918.5 million, down 1.6 percent from $933.3 million the year before. Excluding the impact of foreign exchange movements, Burger King revenues grew 8 percent and Tim Hortons revenues grew 5.2 percent over the prior year.
Nutella-filled pastries proved popular at Tim Hortons.
“Successful marketing platforms, innovative product launches and consistent focus on guest satisfaction led to global same-store sales growth of 5.6 percent for Tim’s and of 4.6 percent for Burger King,” said Daniel Schwartz, CEO, during an April 28 earnings call with financial analysts. “Strong sales momentum at both brands contributed to growth in franchisee profitability, building on the progress that we made last year to further improve our restaurant operators’ bottom line.”
Driving growth at Tim Hortons were successful limited-time offerings, including a croissant breakfast sandwich, grilled wraps and Nutella-filled pastries. At Burger King, Grilled Dogs, which launched in February, have “quickly become guest favorites,” Schwartz said.
“We saw new guests coming to come try the Grilled Dogs, we saw existing guests adding Grilled Dogs to their meals,” he said. “So we saw it as a mix of entrees and as add-ons. So it was a nice healthy mix, with a good ticket average for us. So we were really pleased with the performance of the Grilled Dogs, both from a guest satisfaction and from a franchise profitability standpoint.”