Burger King/Tim Hortons owner profit gets boost from new menu items

Mon Jul 27, 2015 5:41pm EDT
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By Anet Josline Pinto and Sneha Banerjee

(Reuters) - Restaurant Brands International Inc (QSR.TO: Quote) (QSR.N: Quote), formed out of Burger King's takeover of Canadian coffee chain Tim Hortons last year, reported a better-than-expected quarterly profit as new menu items helped attract customers.

The world's third-largest fast-food restaurant group's shares rose 7.5 percent to a five-month high on Monday after both chains posted a rise in second-quarter comparable restaurant sales.

Burger King's comparable sales rose 6.7 percent, the most in nearly a decade, helped by the launch of items such as extra long pulled pork sandwiches and mozzarella bacon cheeseburgers as well as the re-launch of chicken fries.

The rise in Burger King's sales was in sharp contrast to a 0.7 percent drop in same-restaurant sales at McDonald's Corp (MCD.N: Quote), the world's biggest fast-food chain.

"I think (Burger King) has been more innovative with their new product offerings than McDonald's has," said Stephens Inc analyst William Slabaugh.

Burger King in March brought back chicken fries, taken off the menu in 2012, due to strong demand from customers.

"... Our guests were telling us on Twitter how much they liked them," Chief Financial Officer Joshua Kobza said on a post-earnings call.

Tim Hortons has also been adding new items such as crispy chicken sandwiches and grilled paninis to boost lunch-time traffic.   Continued...

A Tim Hortons coffee cup is seen on the ground outside a shop near Times Square in New York August 26, 2014.  REUTERS/Brendan McDermid