(Corrects 16th paragraph to say revenue beats estimates, not misses. The error appeared in a previous version of the story as well. Also addd dropped word “sales” in fourth paragraph)
* Q3 profit of $0.43/shr vs est of $0.40/shr
* Burger King comp sales in US and Canada fall 0.5 pct
* Shares fall as much as 3 pct
By Anet Josline Pinto
Oct 24 (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. restaurant sales.
“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.
“Burger King has more work to do to increase its appeal - including focusing on core lines and the overall restaurant experience,” Saunders wrote.
Total comparable sales at Tim Hortons, which operates mainly in Canada, rose 2 percent in the third quarter, compared with a growth of 5.3 percent last year, when new lunchtime offers boosted growth.
Restaurant Brands’ net profit attributable to shareholders rose to $86.3 million, or 36 cents per share, from $49.6 million, or 24 cents per share, a year earlier.
Total costs and expenses fell 3 percent to $655.2 million.
Excluding items, the company earned 43 cents per share, beating the analysts’ average estimate of 40 cents, according to Thomson Reuters I/B/E/S.
Stephens analyst Will Slabaugh said the quarter’s performance was “sufficient.”
“QSR remains one of the few restaurants where investors can easily draw a multi-year path to margin improvement and earnings upside.”
Oakville, Ontario-based Restaurant Brands’ revenue rose 5.5 percent to $1.08 billion, beating analysts’ estimate of $1.06 billion.
The company raised its quarterly dividend to 17 cents per share from 16 cents.
U.S.-listed shares of Restaurant Brands were down 2.1 percent at $46.01 in early trading. The stock was down 1.96 percent at C$61.38 in Toronto. (Reporting by Anet Josline Pinto in Bengaluru; Editing by Shounak Dasgupta and Saumyadeb Chakrabarty)