OAKVILLE, ONT. — Operating with a strategic focus on balancing value and premium — and keeping a keen eye on the guest experience — worked well for Restaurant Brands International, Inc. during the third quarter. Earnings rose sharply while revenues moved up narrowly at the operator of Burger King and Tim Hortons restaurants.
|Daniel Schwartz, c.e.o. of Restaurant Brands|
“We haven’t seen anything materially different with respect to the competitive landscape,” Daniel Schwartz, chief executive officer, said during an Oct. 24 conference call with analysts. “We’ve said this before. We are here for the long run. All the decisions we make, all the decisions we take are what we believe is going to be in the best interest of our brands for the long run.”
Net income at Restaurant Brands in the third quarter ended Sept. 30 totaled $86.3 million, equal to 37c per share on the common stock, up 74% from $49.6 million, or 25c per share, in the same period a year ago. Total revenues also were higher during the quarter, climbing to $1,075.7 million from $1.019.7 million.
Mr. Schwartz said the company has maintained the same strategy for Burger King since 2010 and the same strategy for Tim Horton’s since acquiring the brand in 2014.
“We need to deliver great guest experience, great value, great service and a nice atmosphere for our guests,” he said. “That hasn’t changed from the beginning.”
Addressing the issue of marketing, Mr. Schwartz said Restaurant Brands remains committed to a balanced approach. Earlier this year, Burger King unveiled a 5 for $4 promotion, featuring a bacon cheeseburger, small fries, chicken nuggets, beverage and a chocolate chip cookie. Heading into the fourth quarter, though, Burger King now is addressing the premium end of the spectrum with the launch of the Bacon King, a sandwich featuring two ¼-lb flame grilled beef patties, topped with thick-cut smoked bacon, melted American cheese, ketchup and mayonnaise on a sesame seed bun.
“We’ve always kind of pivoted between a balanced approach in value and premium,” Mr. Schwartz said. “And our overall strategy hasn’t changed, regardless of the macro environment.”
Adjusted EBITDA at Burger King in the third quarter totaled $201.8 million, up 2.5% from $196.7 million in the same period a year ago. Revenues also increased, moving up to $285.8 million from $282 million.At Tim Hortons, adjusted EBITDA increased 18% to $287.1 million from $244 million, while revenues rose 7% to $789.9 million from $737.7 million in the same period a year ago.