TORONTO — Comparable sales for Popeyes Louisiana Kitchen grew 12 percent in the fiscal year ended Dec. 31, 2019, which included a 34 percent jump in the fourth quarter.
“As you might expect, a good deal of this growth was driven by the launch of the chicken sandwich, which surely ranks among the greatest product launches in the history of QSR (quick-service restaurants),” José E. Cil, CEO for Restaurant Brands International Inc., said in a Feb. 10 earnings call.
Burger King, another restaurant chain owned by Restaurant Brands, reported strong international sales and global comparable sales growth of 3.4 percent in the fiscal year. Executives of Restaurant Brands in the earnings call gave details on plans for Tim Hortons, which had a comparable sales decline of 1.5 percent.
Comparable sales refer to the percentage change in restaurant sales in one period from the same period of the prior year. It applies to Burger King and Tim Hortons restaurants that have been open for 13 months or longer and Popeyes restaurants that have been open for 17 months or longer.
Popeyes relaunched the chicken sandwich on Nov. 3, 2019, which led to it trending on Twitter and becoming a top search on Google, Cil said.
“We also had billions of media impressions and generated earned media worth considerably more than the size of our entire annual US ad fund spend,” he said.
Systemwide sales for Popeyes increased 19 percent for the year to $4.40 billion, which included a fourth-quarter gain of 42 percent to $1.33 billion.
Traffic driven by demand for the chicken sandwich helped to increase sales in the entire Popeyes menu in the fourth quarter, Cil said.
“Just to give you an idea about that, following the launch of the chicken sandwich in November, only about 50 percent of total tickets of Popeyes in Q4 contained a purchase of the chicken sandwich, which means a lot of the growth came from growth in other categories in our menu, which is quite exciting,” he said.
The performance of Popeyes in the United States has created excitement with existing franchise partners and prospective investors, Cil said.
“So we think long term, there is a lot of room for growth for Popeyes in the US,” he said. “Obviously, internationally, we think there’s a tremendous opportunity for growth. Clearly, Asia is a place where fried chicken and chicken in general does quite well, and we think we can be a really compelling second offer in the region.”
Globally, 3,316 Popeyes restaurants were in operation at the end of the fiscal year.
Systemwide, Toronto-based Restaurant Brands International reported net income of $1.11 billion, or $2.40 per share on the common stock, in the fiscal year, which was down 2.9 percent from $1.14 billion, or $2.46 per share, in the previous fiscal year. Systemwide sales of $34.03 billion were up 6 percent.
Burger King reported systemwide sales of $22.92 billion for the fiscal year, up 9 percent. Comparable sales in the United States increased 1.7 percent for the fiscal year behind momentum in core offerings and a strong performance from the Impossible Whopper, a plant-based burger that is now part of a 2 for $6 promotion.
“Given the sustained performance of the Impossible Whopper, we’re confident the plant-based food represents a new platform for the brand and one that we can build into new occasions, day parts, products and proteins,” Cil said.
Burger King’s international business now accounts for a majority of the chain’s global sales, Cil said.
“Our results for the full year included another very strong contribution from our international business, where system-wide sales expanded over 15 percent, increasing over $1 billion year over year,” he said.
He addressed the coronavirus that originated in China.
“Our immediate focus is the health and well-being of our partners and guests in cooperating with local and government officials working to contain the coronavirus,” he said.
Burger King China accounted for about 2 percent of the chain’s consolidated systemwide sales in 2019.
“While it’s too early to say how long the impact on our business there will last, we’re monitoring the situation very closely,” Cil said.
At Tim Hortons, sales over the fiscal year declined 0.3 percent to $6.72 billion. Coffee will play a role in efforts to boost sales in 2020. Tim Hortons will roll out fresh brewers and water filtration systems at every store in Canada. Non-dairy alternatives like almond milk will be offered to customers to stir into their coffee.
Digital registration will help expand the Tim Hortons loyalty program. Over C$100 million will be used in the next 12 to 18 months to develop outdoor digital menu board technology at Tim Hortons drive-through locations across Canada, said Matthew Dunnigan, chief financial officer for Restaurant Brands International.
In the fourth quarter, Restaurant Brands International reported net income of $257 million, or $0.55 per share on the common stock, which was down 15 percent from $301 million, or $0.65 per share, in the previous year’s fourth quarter. Sales in the fourth quarter were $8.91 billion, up 10 percent.