Weather weighs on earnings at Burger King
April 29, 2010
by Eric Schroeder
MIAMI — Severe U.S. weather conditions in January and February weighed on third-quarter earnings at Burger King Corp. Net income in the quarter ended March 31 totaled $41 million, equal to 30c per share on the common stock, down 13% from $47.1 million, or 35c per share, in the same period a year ago. Net sales fell 1% to $596.9 million from $599.9 million.
Despite the lower results, John Chidsey, chairman and chief executive officer for Burger King, said he was encouraged by the company’s overall performance in March, including positive U.S. traffic and sequential quarterly improvement in average check, which was helped by the national launch of the premium Steakhouse XT burger.
During the third quarter Burger King said it focused its U.S. marketing efforts on the company’s barbell menu strategy with a continued emphasis on value, including the $1 ¼-lb Double Cheeseburger promotion. On the indulgent end of the menu, the February launch of the Steakhouse XT burger helped drive results, Burger King said.
Also during the third quarter, Burger King opened 37 new restaurants and completed the acquisition of 35 restaurants in Singapore in early March. The company now is on pace to open 250 to 300 net new restaurants as previously forecast.
For the nine months ended March 31, net income totaled $137.8 million, or $1.02 per share, down 2% from $141.2 million, or $1.05 per share, in the same period of fiscal 2009. Net sales totaled $1,385.2 million, down 2% from $1,418.9 million.
Earlier this week Burger King launched the Whiplash Whopper sandwich in conjunction with the May 7 movie opening of “Iron Man 2.” The limited-edition item features a flame-broiled Whopper sandwich topped with pepper jack cheese, crispy red peppers and spicy mayonnaise. The sandwich has a suggested retail price of $3.79 at participating restaurants throughout the four-week promotion.