Q4 comparable sales increase at Burger King, Tim Hortons; fall at Popeye's
Feb. 13, 2018
by Monica Watrous
Burger King has system-wide sales growth of 10.1 percent in 2017.
OAKVILLE, Ontario — The fast-food value wars in the United States led to declines at Popeyes Louisiana Kitchen in the latest quarter, said Daniel S. Schwartz, CEO of parent company Restaurant Brands International Inc. But at Tim Hortons and Burger King, comparable sales fared better, helped by technology and menu innovation.
Net income attributable to common shareholders of Restaurant Brands International in the year ended Dec. 31, 2017, was $626.1 million, equal to $2.64 per share on the common stock, up sharply from $345.6 million, or $1.48 per share, the year before. Revenues totaled $4,576.1 million, up 10 percent from $4,145.8 million.
|Daniel Schwartz, CEO of Restaurant Brands International
"Our Tim Hortons business achieved 3 percent system-wide sales growth for the year, primarily driven by net restaurant growth," Schwartz said during a Feb. 12 earnings call. "We achieved some important initiatives at Tim's this year, including launching our mobile app and our espresso-based beverage platform across Canada and the US and opening our first restaurants under our Master Franchise Joint Venture partnerships in each of Asia, Europe and Latin America.
"We had a good year at Burger King, where we achieved comparable sales of 3.1 percent, which, coupled with net restaurant growth of 6.5 percent, led to system-wide sales growth of 10.1 percent. We also achieved important initiatives at BK, including continued acceleration of net restaurant growth, the signing of numerous development agreements and the continued creative promotion of our brand, as recognized through the receipt of several marketing awards, including Creative Marketer of the Year at Cannes Lions.
Tim Hortons achieved 3 percent systemwide sales growth for the year, primarily driven by net restaurant growth.
"At Popeyes, we made good progress integrating the business after acquiring it earlier in the year. System-wide sales grew by 5.1 percent for the year, driven by net restaurant growth of 6.1 percent, partially offset by global comparable sales of negative 1.5 percent resulting from the heightened competitive activity that we saw in the US."
For the fourth quarter, net income attributable to common shareholders of Restaurant Brands International equaled $395 million, or $1.64 per share, up from $118.4 million, or $0.50, in the year-ago period. Revenues totaled $1,234.2 million, up 11 percent from $1,111.4 million.
During the quarter, comparable sales increased 0.1 percent at Tim Hortons and 4.6 percent at Burger King, while Popeyes comparable sales fell 1.3 percent in the quarter.
Popeyes' systemwide sales grew 5.1 percent for 2017.
"In the US, heightened competitive activity, with a particular focus on value discounting, continued into the fourth quarter," Schwartz said of Popeyes' performance. "Though we still have work to do, US comparable sales have improved sequentially in the fourth quarter, and we've been testing a number of marketing initiatives in recent months that, we believe, will help us build on that momentum for improved results this year."
Meanwhile, Burger King benefited from "a balanced approach to menu initiatives across price points and products," Schwartz said.
"We continue to innovate around our Bacon King and our Crispy Chicken sandwich, two platforms that performed particularly well in 2017," he said. "We also had several successful value promotions during the quarter that contributed positively to our results, and we believe that maintaining this balanced menu offering to provide our guests with products that they love at great prices will continue to drive further sales growth over the long run."
The company also announced changes to its leadership team. Joshua Kobza, previously chief financial officer since 2013, has been named to the new role of chief technology and development officer. Succeeding him in the CFO role is Matthew Dunnigan, who has served as treasurer since joining the company in 2014.