Burger King, Tim Hortons Post Earnings For First Time In Years

Burger King’s parent company, Restaurant Brands, Inc. (QSR), is liking the merger thus far.

The New York Times is reporting that two of the company’s chains, Burger King and Tim Hortons, posted an increase in the same-store sales for the first quarter for the first time in years.

Tim Hortons reported that their stores that have been open for 13 months or longer rose 5.3 percent for the first quarter, based on the strong new menu items such as the steak and cheese panini. It was Tim Hortons’ best quarterly increase for comparable store sales in at least three years.

Burger King has reported a quarterly same-store increase of 4.6 percent, which represents Burger King’s biggest quarterly increase in nearly seven years. Sales were helped by Burger King’s “2 for 5 dollars” promotions, as well as Burger King’s new Spicy BLT Whopper.

System-wide sales for Tim Hortons rose 8.1 percent, while Burger King increased by 9.6 percent on a constant currency basis. There was a loss of $8.1 million, attributable to shareholders, which amounts to 4 cents a share for the first quarter, which ended March 31. The same shareholder loss for the fourth quarter was $514.2 million, or $2.52 per share.

On an adjusted basis, the company reported a net gain of 18 cents per share. Quarterly revenue was reported at $932 million, compared to $416.3 million last quarter, more than doubling the quarterly revenue.

According to the USA Today, the earnings results were the first reported since both companies completed their $11 billion merger, which created the third-largest fast-food chain worldwide. The company then moved the main corporate headquarters to Ontario, Canada.

In spite of the good news, investors still sent the stock price down 2.36 percent, to a share value of $40.59 at Monday’s close. The 18 cents per share increase is three cents higher than originally forecast by financial analysts.

“We are off to a strong start in 2015, having achieved one of our best quarters of comparable sales growth in years for both of our iconic brands,” Restaurant Brands CEO Daniel Schwartz said in a statement issued with the earnings results.

Restaurant Brands also declared a 10-cent dividend per common share.

Burger King’s revival of lower-priced chicken nuggets has cut into McDonalds’ nugget sales. Tim Hortons’ also expanded its coffee base to include a dark roast coffee and added a Crispy Chicken Club sandwich. All these additions reflect the progress the company is making.

This merger represents the move to mergers for the purpose of corporate tax inversions, merging American companies with foreign companies, them moving the new corporate structure out of the United States to reduce the tax burden on the parent company. Though the Department of Treasury has made it more difficult to “merge and move,” the success of the Burger King/Tim Hortons’ merger may prompt more companies to follow suit.

[Image courtesy of Justin Sullivan/Getty Images]