Could 2 (Reuters) – Restaurant Manufacturers Worldwide Inc (QSR.TO) beat Wall Road estimates for first-quarter income and revenue on Tuesday, boosted by larger site visitors and costs at Tim Hortons eating places in Canada regardless of closures of some U.S. Burger King areas.
The corporate’s international comparable gross sales rose practically 10% within the March quarter, versus analysts’ estimates of 6.5% in line with Refinitiv IBES knowledge. Tim Hortons Canada gross sales grew 16% and Burger King Worldwide’s had been 12% larger. Shares had been up 1.5%.
Massive restaurant chains have posted sturdy gross sales within the first quarter regardless of rising considerations about client spending energy this yr amid stubbornly excessive inflation.
McDonald’s Corp (MCD.N) and Chipotle Mexican Grill Inc (CMG.N) additionally topped quarterly gross sales and revenue expectations as they pushed new menu objects and raised costs over the previous yr to guard margins from a bounce in uncooked supplies and labor prices.
Whereas Burger King has been including eating places and rising comparable gross sales internationally, in the USA it has struggled with bankruptcies by two huge franchisees.
Within the first quarter, Burger King closed a web 124 U.S. areas or 1.7%, to finish the quarter with slightly below 7,000 U.S. eating places, in line with its earnings launch.
This yr, the model is looking for extra franchisees with stronger funds however nonetheless expects to shut between 300 and 400 extra eating places, Chief Government Joshua Kobza stated throughout a name with buyers. Often, it closes a pair hundred yearly, he stated.
“There’ll at all times be a minority (of franchisees) who aren’t devoted, enthusiastic operators,” Chairman Patrick Doyle stated on the decision. “We’ll work with them to depart the system.”
The model’s $400 million “Reclaim the Flame” turnaround plan – to reverse its lack of market share, revive run-down eating places, streamline overly difficult menus and operations, and draw extra younger clients – could also be beginning to work as Burger King’s U.S. comparable gross sales rose 8.7%.
Tim Hortons drove visits larger – together with throughout afternoon hours – with new objects like chipotle steak for its loaded bowls and wraps.
Greater menu costs and different choices like chilly brew additionally drove gross sales.
Excluding objects, Restaurant Manufacturers, which additionally owns Popeyes and Firehouse Subs, earned 75 cents per share, in contrast with estimates of 64 cents, in line with Refinitiv IBES knowledge.
Whole income rose to $1.59 billion from $1.45 billion a yr earlier. Analysts on common had anticipated $1.56 billion.
Reporting by Ananya Mariam Rajesh in Bengaluru, Enhancing by Subhranshu Sahu
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