Burger King’s Parent Company Reports Sales Gains, Losses Due To Merger

You take the good with the bad. In this case, it points to something quite interesting.

Reuters is reporting that Restaurant Brands International, the parent company of both Burger King and Tim Hortons, have reported a gain in sales in both establishments for the quarter.

Same-store sales grew 4.1 percent at Tim Hortons and 3 percent at Burger King in the quarter, Restaurant Brands reported. On a constant currency basis, system-wide sales grew 7.4 percent at Tim Hortons and 7.7 percent at Burger King.

Restaurant Brands is crediting the newer products from both companies for the sales increase. Tim Hortons’ new dark roast coffee and Burger King’s A1 Ultimate Bacon Cheeseburger have been recognized as helping same stores increase.

These sales increases, coupled with some 350 corporate jobs at Tim Hortons as part of the post-merger reorganization, reflect the changes that both restaurant chains are making to grow the brand.

“We executed our organizational restructuring up front, which really focused on back office, corporate areas where we said we’d see overlap in the business,” Chief Executive Daniel Schwartz told Reuters. “We have no plans to have any more job cuts.”

This is in the face of McDonalds, who posted yet another same-store sales decline for the eighth month in a row. This is unheard of for McDonalds, who is currently having one of its worst years in its history.

Part of Restaurant Brands’ strategy is to have Tim Hortons chip away at the dominance McDonalds once held in the breakfast market. Other restaurants, such as Taco Bell, have begun taking part of the market from the burger giant.

CNBC is reporting that Restaurant Brands posted a net loss of $514.2 million, or the equivalent of $2.52 per shareholder, for the last quarter ending on December 31. This loss is attributable to investors. The loss is being blamed on many one-time payments as a result of the merger. Burger King purchased Tim Hortons for $12.46 billion (Canadian) back in August, forming the third-largest restaurant chain in the world.

Restaurant Brands reported a revenue of $416.3 million for the last quarter. And, even though both restaurants are being run as separate entities, the stock for the parent company has risen over 14 percent since it was introduced to the Toronto Exchange up to Friday’s close.

Shares of Restaurant Brands International, which have risen overall in value by more than 40 percent on the Toronto Stock Exchange since being listed in December, jumped another 10.1 percent on Tuesday to C$53.14.

[Image courtesy of Canadian Business]