OAKVILLE, Ont. – Comparable store sales at Burger King and Tim Hortons restaurants dipped in the first quarter of 2017, parent company Restaurant Brands International (RBI) reported April 26. Despite the lackluster performance, executives at the company remain excited about the future and especially the potential of the newly acquired Popeyes Louisiana Kitchen brand.
For the three months ended March 31, comparable sales at Tim Hortons and Burger King slipped 1 percent. The decline at Burger King was driven by a 2.2 percent drop in US comparable sales growth, while a 0.2 percent decline in Canada comparable sales growth drove results at Tim Hortons.
However, results partially were offset by net restaurant growth in both chains — 4.6 percent at Tim Hortons and 5.1 percent at Burger King.
“We had an exciting first quarter this year in which we completed our acquisition of Popeyes, an iconic brand with a rich Louisiana heritage,” CEO Daniel Schwartz told analysts during an investor conference call. “We also continued to grow our Tim Hortons and Burger King brands, increasing system wide sales despite relatively flat comparable sales growth. We remain confident in our strategies to accelerate comparable sales growth and to grow franchise profitability for each of our three brands for many, many years to come.”
RBI bought Popeyes in February for $79 per share in cash, or $1.8 billion. Popeyes is one of the world’s largest quick-service restaurant chicken concepts, with more than 2,600 restaurants in the US and 25 other countries. Executives at RBI expressed enthusiasm for the opportunity to further develop the Popeyes brand abroad. CFO Josh Kobza said RBI views chicken as a significant global category in which Popeyes can be a much bigger player.
“We’re in about 25 countries already all around the globe and we have a successful business in many of those countries around the world,” Kobza told analysts. “So we’ve built out partnerships around the world, supply chains and operations, and we've seen that the brand and the products resonate really well with customers all around the world.
“I think those two things give us a lot of confidence around where we can take the brand and we're excited to work on it with our existing and potentially new partners in the coming years.”
Net income attributable to shareholders was $50.2 million compared with $50.0 million in the first quarter of 2016. Diluted earnings per share were flat at 21 cents.
Total revenues for the quarter were $1,000.6 million compared to $918.5 million in the year-ago period.
Schwartz said the launch of espresso-based beverages and the Tim’s mobile app are expected to drive improved sales at the coffee-and-donut chain.
“In the US, we remain focused on improving the quality of our products and innovating around our existing platforms, bringing impactful but operationally simple products to our guests,” Schwartz said. “One such example of this is our improved Crispy Chicken sandwich, which we launched in late Q1 and which is performing well.
“Heading into the second quarter, we’re excited to have launched our steakhouse King Burger, which is another example of innovation around our highly successful Bacon King product launched in the fourth quarter of last year. Additionally, heading into the second quarter, we launched a fruit loop shake, a fun and delicious product, which we believe gives our customers yet another exciting reason to revisit our restaurants.”
