Restaurant Brands International shares fell about 1.5% at Thursday’s open even after Burger King posted its strongest U.S. comparable sales in years. Burger King’s U.S. comps jumped 8.5% in the quarter ended June 30, far above the 3.5% analysts expected and the 1.5% it recorded a year earlier, marking two straight quarters of outperformance versus McDonald’s, which managed only 0.8%. The gains were driven by value deals such as “2 for $5” and “3 for $7” and by sustained investment in remodels and marketing. However, Tim Hortons, which generates roughly 41% of Restaurant Brands’ operating income, saw Canadian comparable sales rise just 0.1%, missing the 1.5% estimate and last year’s 3.6%. Company-wide global comps reached 3.8% against a 3.0% forecast, revenue of $2.52 billion slightly missed estimates, and adjusted EPS climbed to $1.07 from 94 cents. Rising beef prices, which account for about a quarter of the food basket, threaten margins on the value-driven Burger King comeback.
Restaurant Brands International IncTim Hortons' weak Canadian sales and rising beef costs overshadow Burger King's strong quarter.
McDonald’s CorporationBurger King's strong comps outperform McDonald's, indicating competitive pressure.
TH International Limited
