Slowing sales at Burger King push parent's shares down

Mon Oct 24, 2016 10:43am EDT
 
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By Anet Josline Pinto

(Reuters) - Restaurant Brands International Inc, owner of Burger King and Tim Hortons, reported a second straight quarter of decline in comparable sales at Burger King in the United States and Canada.

The company's U.S.-listed shares, which had risen about 26 percent this year up to Friday's close, fell as much as 3 percent despite a better-than-expected third-quarter profit.

Total comparable sales at Burger King rose 1.7 percent in the quarter ended Sept. 30, far less than the 6.2 percent rise a year earlier. Comparable sales in the United States and Canada fell 0.5 percent.

McDonald's Corp raised expectations across the fast-food industry last week after posting a better-than-expected 1.3 percent rise in U.S. restaurants.

"In light of McDonald's more robust numbers, it is disappointing that Burger King did not push into positive territory," Neil Saunders, CEO of retail research firm Conlumino, wrote in a note.

U.S. burger chains, including McDonald's, Burger King and Wendy's Co, are battling intense competition from upstart chains and meal-kit sellers.

The sector is also under pressure from a drop in grocery prices, a trend that is encouraging more people to eat at home.

Burger King introduced new menu items such as Whopperrito, a burger-burrito mash-up, and Cheetos Chicken Fries, but the launches failed to attract more customers.   Continued...

 
The logo of Burger King is seen outside a shop in Vienna in Vienna, Austria, October 1, 2016.    REUTERS/Leonhard Foeger/File Photo